What is happening to Residential Property in Australia

Your Belief will determine your own Results

If you do yourself an absolute disservice, then believe what you are reading in the newspapers!

OR

Read reports written by property analysts who are reporting factual evidence.

Choose carefully to who you listen to, be mindful that you will seek out evidence that is aligned to your beliefs. Meaning if you are of the frame of mind of doom and gloom and property crashes then headlines and articles written in this vein will attract your attention and confirm your belief.

The result will be you once gain do nothing, hoping your belief comes true whilst you wait and watch.

If your belief is one of creating and growing financial freedom for yourself with a dose of future optimism in the world and Australia settling into it’s new form of normal of which you want to be a part of then your will look for the information out there that supports your belief and motivates you to take action.

When you take action you will get the results you want and deserve, so long as you act upon informed and educated analysis.

Having said this, if you follow the Expert Observer being Terry Ryder he tells it like it is and points out based on factual evidence that capital city markets and regional markets are either holding firm or actually growing during Covid-19. Aside from inner CBD apartments, the majority of property continues to demonstrate sound resilience with signs of growth on the horizon.

Reasons why markets are holding firm include :

First Home Buyers incentives, HomeBuilder incentives, historically low interest rates (predicted to remain low for several years), very low supply compounded by a reasonable demand and unemployment did not increase as much as expected.

The owner occupied market is very busy with active buyers both in the inner suburbs and in regional centres resulting in game changing trends in particular where buyers are looking regionally to escape big city viral dangers, big city prices, congestion, rat race and expensive property prices.

There is a major shift to regional areas to secure a more natural quality of life, having their children growing up in the type of safe and friendly suburbs we all grew up in, where property prices are comparatively cheap or rents lower so that a family who couldn’t afford to buy in the inner suburbs or rent in the inner suburbs of a capital city, can now afford to buy or rent the type of dwelling they need and want to live in. This is becoming knows as an Exodus to an Affordable Lifestyle.

First home buyers are the most active market participants followed by those who are taking advantage of either regional lifestyles or upgrading into a larger home whilst interest rates are this low and government incentives are very much on hand.

Market Confidence

In cities where Covid is under control, market confidence is already on the increase ensuring the market continues to be a sellers’ market lending more confidence to vendors and on the other side of the coin higher confidence to property investors on the back of very low vacancy rates.

Vacancy rates remain very low in many markets across both regional and metropolitan Australia, resulting in an increase in rental yields. What usually follows when rents increase is capital growth. It is becoming commonplace to find locations with vacancy rates under 1% with rental managers crying out for more supply. Investors are starting to take notice.

Looking at the Exodus to Affordable Lifestyle and the shift to regional Australia pretty much all regional centres in Victoria, NSW, QLD, SA are experiencing an increase in demand. The supply of vacant land which is titles is almost non-existent on the back of HomeBuilder grants and the massive uptake by first home buyers. Read Regional Centre Demand Surge here

Looking more centrally, the cities least affected by Covid (Adelaide, Brisbane, Hobart, Canberra, Darwin etc) are proving to be busy markets demonstrating an increase in sales activity. Brisbane is continuing to rise steadily whilst Canberra continues to deliver price growth month on month since March 2020.

The locations benefiting the most from the above trends include Adelaide, Brisbane, Regional Victoria, Regional NSW and Regional QLD amongst other locations. Whilst Perth looks to be making a comeback with lower vacancy rates and an increase in demand from buyers.

When should I buy or Invest?

Factual market evidence continues to point out that the time to buy property was yesterday, is today and will be tomorrow. That there really is no best or worst time to buy property and those that continue to try time the market continue to get it wrong … so why bother?

Property performs on the back of many required market fundamentals which include : the economy; employment; population growth; consumer confidence; supply; demand; availability of credit; demographics and government policy.

The market fundamentals at play right now include : consumer confidence, an exceptionally low supply, a very strong demand, credit is available and government policy is intact. Whilst unemployment did not increase to where projected and the population growth has slowed down there are signs of employment levels increasing as Covid infections continue to decrease and on the back of our international borders opening once again, population growth plans will once again come into effect.

Market Demand

There remains a massive increase in demand for people wanting to come live in Australia (viewed as the lucky country). On the back of current market fundamentals and future fundamentals the best time to buy or invest in a property remains today.

Read what is happening in Regional Australia’s growth corridors using Toowoomba as an example here. Covid-19, First Home Owners Grants, HomeBuilder and other factors are driving up demand in Regional Centres, yet supply is falling by the wayside. This will be inflationary forcing land prices upwards, whilst builders will increase their fees on the back of a very strong demand. Read more here

Did you know?

Did you know that median property values remain higher now than they were 12 months ago in all of our capital cities (except Perth), with Melbourne at +6.1% and Sydney at +10.2%?

Did you know that during the last recession Australia had in 1990, overall house prices did not crash, in fact some locations continued to thrive (just like now) and the biggest losses were experienced in Melbourne at a poultry fall of only 6%?

Did you know that after each recession or global pandemic or epidemic, a surge in property prices soon followed?

And as the editor, this one is from me “did you know that those predicting a property crash and are waiting to see what happens, are the exact same people that have always waited to see what happens and will always continue to see what happens”, they also get the same results they always get and are the same people that will always say “I SHOULD HAVE!” …. Because they certainly have a lot less money on which they are eking out a retirement on!

History has a way of always repeating itself. And you have to be in it to win it.

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