It’s been a whilst since I wrote about the Australian Real Estate Market so I thought I’d write an entry to give an update on whats going on from a housing perspective in this great land of ours.
In Perth the rising interest rates and an exodus of investors has trebled the number of houses on the market.
Figures released by the Real Estate Institute of Western Australia (REIWA) show a dramatic increase in number of properties for sale.
The Institute says that the number of properties for sale has climbed from 4-thousand 8-hundred two years ago to almost 17-thousand today.
The President Robb Druitt says some investors are pulling out because it is no longer as profitable to invest in Western Australia and having seen the slow down in the rate by which houses are increasing over here I can certainly validate this point.
Houses are still selling though. On our street alone it doesn’t seem to be too long before the ‘For Sale’ sign outside of peoples houses is quickly replaced with a SOLD sign.
House prices appear to be stabalising at the moment to but this still means that by ‘old Aussie standards’ houses are still a lot more expensive then they were 3 – 5 years ago.
Having said that, it looks like house prices could continue to rise even higher with some Analysts predicting that Housing prices across Australia could rise by a further 40 percent!
Economic forecaster BIS Shrapnel says the housing affordability crisis will only get worse as demand for housing continues to outstrip supply but surprisingly the relatively high interest rates here in Australia could influence this.
Our forecast is for anywhere between 25 and 40 per cent across most of the capital cities… The environment will still stay tough for the next 12 to 18 months because of rising interest rates. But as the interest rate situation stabilises we expect a lot of those pent-up demand pressures to be released onto the market in terms of rising price growth.
Apparently at least 30,000 more homes need to be built each year to keep up with the demand for housing, especially with overseas migration at record highs. Unfortunately the actual number of new houses being built falls well short of this figure.
The lack of land seems to be a pretty large influencing factor here, after all theres no point building 30,000 new houses a year if there is no where to put them and this is starting to have a further knock on effect on housing affordability, especially with first time buyers!
Heading back to Perth again, the average first-home buyer can afford to buy only one in 10 properties!
In summary I think it’s fair to say that the property market here in Australia is a little ‘vexed’ .
The problem starts if you don’t want to live there.
On the bright side, if your a builder, bricklayer, electrician or someone holding a skill which would be well utilised within the building industry then don’t worry. It looks like you’ll have plenty of work to keep you busy for a very long time