What ingredients do you need to make Australian property prices start to rise once more?
A decent dash of population boom and new project commencements, capped off with a low interest rate environment.
At least that’s the sentiment expressed by Meriton Property’s managing director, Harry Triguboff, in a recent Business Spectator article.
Is the tide turning?
He says the RBA’s recent rate cuts have seen the tide start to turn for housing in Sydney and, albeit to a lesser extent, in the beleaguered Brisbane and Gold Coast.
But he says without a long term focus on continuing population growth in the order of half a million new migrants per annum and construction of new dwellings to house all of these new Australians, the turning tide of improved fortunes for real estate may be at risk.
Too few Australians
Triguboff claims that 23 million is an inadequate number of people to sustain the running of our “huge continent” into the future and with more people comes the need for more accommodation.
“With migration rising there will be more need for accommodation and we must build more,” he says.
“But until councils become more responsible and approve viable projects on time it will be very difficult.”
Triguboff claims that council concerns over negative community sentiment, with regard to high-density apartment accommodation going up in their neighbourhoods, are largely unfounded.
Apartment development is desperately needed
He says apartment development is desperately needed in Australia’s inner city areas and that people who buy into these types of developments don’t actually mind the fact that the buildings can be tall and imposing.
“Councils think that people care whether there are tall buildings or lower buildings. People who buy the apartments prefer taller buildings because they allow more light and afford views and are cheaper to run than lower ones – which require more lofts, more stairwells, and more security, all adding to the upkeep,” says Triguboff.
He says that while there are signs of over-development in the commercial sector, with many retail and office premises sitting empty, councils need to introduce rules that will ensure future projects are viable when it comes to addressing our ongoing accommodation shortage.
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