It was all doom and gloom in the lead up to the federal election and now, apparently, the housing market is set to improve, with some predicting another boom.
For mine nothing has really changed as the Australian housing market still faces the same range of issues.
10 Things Future Housing List
I like to number things, so here is my 10 things Future Housing list:
- Also read:Exploring the link between population growth and property prices
- Also read:Australian unit market update June 2022
- Also read:Here is what we have been buying over the last 12 months
- Also read:EXPLAINER: New home buyer scheme helps frontline workers get into the property market
- Also read:Number of profitable property resales takes first dip in 18 months | Corelogic Pain and Gain Report
- Limited wage growth regardless of what the government says or the RBA does.
- The rise of 'The Algorithm', better tech and a move towards automation and robotics will also see rising under-unemployment and less full-time work.
- Most new jobs will be in service industries. Much of this work will service the local community, be part-time and also be low paying gigs.
- Low inflation is here to stay and disinflation is on the rise. Disinflation is when a Kit Kat is still $1 but is now 45g instead of 55g. Meanwhile, the cost of utilities, insurance and compliance are increasing and sharply.
- 'Starting out' (young renters + first home buyers) and 'downsizers' are the two major housing demand cohorts.
- More of us will cluster together – living/working in select urban locales - there are strong economic reasons behind this trend.
- Most new overseas migrants live in large family groups and are used to, even prefer, multi-generational housing.
- Housing affordability, is and will remain, low for most of the community.
- Limited generic capital gains and overall rental growth for the next five years, maybe longer.
- Investors will need to manufacture growth and positive rental yields will drive most investment decisions.
In summary, two incomes per household won't cut it anymore.
Households will either move to a cheaper location or stay in the same area, but buy or rent a more compact dwelling.
Many, if not most, I believe will take in an extra person/s to help them make ends meet.
This applies to both owner occupied housing and also investments.
2 more things
1 . Rental growth is at a all time low
2. Household size is increasing not falling
|Australian average household size|
|Estimated residents||Occupied private dwellings||Average household size|
|Matusik + ABS|