Experts who are claiming that the property market will crash over the next year will soon be caught with their pants down.
Because they’re looking at the wrong numbers.
They point the finger at interest rate rises, but even a rate rise of two per cent will still leave rates lower than they were ten years ago.
More to the point, one-third of our dwellings are owned without any remaining debt, and another third are investors, who can claim the cost of interest against their other income.
Only those who bought recently and borrowed to the max are hoping for some rate relief, and that’s less than ten per cent of all property owners.
Property builders and developers are faced with growing material and labour shortages plus escalating costs and this is significantly impacting the number of new dwellings being built.
According to the Bureau of Statistics, the number of new house approvals in the twelve months to the end of July 2022 fell by 17.4 per cent while the number of units approved fell by 26 per cent.
These sorts of declines are unlikely to be reversible in the foreseeable future.
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At the same time, several hundred thousand migrants, students and refugees who view Australia as a safe haven are arriving here, and hundreds of thousands more are waiting for their entry visas to be approved.
They will all need a place to live, and this will lead to a sudden rise in housing demand, especially rental demand as most arrivals start out being renters.
There may be one more interest rate rise this year, but as the market adjusts to slightly higher repayments, investors and home buyers will return to the market, which can only lead to a huge rise in buyer demand.
Instead of being put off by scary headlines, investors looking at the above fundamentals will see that right now offers them a once-in-a-lifetime opportunity.
While uncertainty temporarily holds many potential buyers back, vendors are more willing than ever to consider low offers.
This won’t last long.
Housing demand is rising and given the lack of supply, our housing markets will soon be booming.
The secret to success is finding suburbs and towns which have strong growth and cash flow potential and then buying at a bargain price before the boom starts.