As the new decade marches on and we get set to enter the second official quarter of 2010, median property market values continue to defy the naysayers who were predicting a rather tumultuous start to the year.
In the wake of rising interest rates, constant talk of affordability issues and the end to the first home owner’s bonus in late 2009, many commentators felt that the beginning of this year would see us end up with an over-inflated housing bubble that was destined to burst in a big way.
As Residex’s latest figures show however (see table below), Australia’s property markets keep growing stronger.
Source – Residex
Confidence started creeping back into the property sector in the second half of 2009 as Australians realised we had escaped relatively unscathed from the Global Financial Crisis that hit much of the rest of the world hard.
In fact, recent reports have shown that apart from Norway, Australian property was the strongest of all developed nations for 2009, showing the most resilience to the economic downturn.
Now that unemployment levels are starting to drop and our economy is looking healthier every day, home buyer and investor activity is starting to pick up and many want to get their foot in the property door before the current boom conditions we’re experiencing see prices soar higher over 2010.
There is a lot of pent up demand from would be home owners and investors who sat on their hands for much of 2009 to “wait and see” whether real estate here would withstand the rough economic seas.
Those who had put off entering the market, upgrading, starting a property portfolio or building on their existing portfolio are now feeling a sense of urgency to make a move before things really heat up, as many are predicting it will in the coming months.
Adding to this pressure cooker effect is the fact that last year’s initial slow down in property values saw many developers hold back from constructing and introducing new stock to an overly cautious market. And then there’s the population explosion due to record immigration figures and a baby boom.
All of these factors – pent up buyer demand, a lull in new dwelling construction and a rapidly growing population; are adding to the surging property wave those of us who work in the industry every day are currently witnessing. There’s no denying that we are on the brink of some pretty heavy duty boom conditions as the property cycle moves into overdrive over the coming months.
The question many buyers and investors are asking now is; have I missed the boat?
While I think 2010 will be a very interesting year for property in Australia’s capital cities and yes, we can expect prices to increase significantly, but I still believe it’s not too late to make a move. As always, it’s about buying right and buying smart.
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