Residential real estate in Australia is expected to continue rising over the next five years. Supply shortages and high immigration rates will drive up both fear of missing out (FOMO) and demand significantly. The cost of new builds has surged, with prices now starting at $750k. Local councils releasing limited land will push more people towards rural areas or smaller cities, further driving up prices.
Those hoping for a crash will likely be disappointed, as any correction is expected to come years later, after prices have already doubled. Potential future homeowners aged 25-35 without familial financial support may face difficulties affording property. Cultural norms and media influence may redefine affordability, potentially making modest accommodations the only viable option for many.
They are never more than viewpoints. In reality, nobody owns a crystal ball. If you took someone’s advice and it didn’t work out, you’re the idiot in this situation.
That is very accurate. Upon hearing that home values might plummet, my sister-in-law decided to sell her residence. She paid the same amount for her mortgage and rent currently, hoping to sell high and purchase low. Furthermore, if she were to repurchase the identical home, the price would be higher than what she received for it. These property projections are unreliable. We’re lucky that we ignored her ridiculous advice to sell.
I would also include those who are following these predictions. Never before has DYOR been more crucial.
The level of serviceability is one important metric to monitor. House prices will be correlated with lower taxes (stage 3) and interest rates that are close enough to improve serviceability. You will raise prices a little if you lower borrowing costs AND give people more money.
You have the ingredients for the next boom when you combine immigration, low stock from fewer new builds, and a shift in demand since COVID-19.