Australian Property Outlook – A look at the bigger picture….
With the Reserve Bank maintaining their position on the domestic cash rate, little has changed in terms of housing affordability across many of our capital cities - in fact, it’s now becoming an even greater challenge for many Australians.
A recent report from mortgage insurer QBE states that as of March 2017, the Australian population was 24,511,800 - an increase of around 1.6% from 2016. In plain English, this means around 7500 people are migrating to Australia every week from various parts of the world. On the flipside, in 2016 our overseas migration increased by around 26.8% or about 231,900 people leaving Australia; that’s approximately 4,459 people leaving the Great Southern Land each week, thus balancing our actual population growth to around 3,000 people per week.
Now the majority of new immigrants coming to Australia will require housing and most will migrate to main or capital cities, hence the intense growth spurts experienced across the eastern seaboard of Australia over the past few years; 3,000 people each week equates to approximately 300 families looking/needing housing each week. This is a dominant factor contributing to the housing boom we have experienced in our larger capitals over the past few years.
With ASIC/APRA (our industry regulators) stepping in to slow down the growth by placing restrictions of foreign investment, this has also created some economic slowing of mining areas in the north and west of the country. However, eastern states have moved along nicely and will continue to do so over the next few years simply because of the continued influx of skilled migration coming into Australia.
This is not a bad thing, in fact quite the opposite!
The best thing about economists’ reports is the broad view you get from differing opinions on what is going on in our great country. It all comes down to your own interpretation and what you take from the reports as important to you personally.
At a glance
- Sydney median home price is now at $1,177,769 - up by around 12.4% YOY
- Melbourne median home price is now $852,724 - up by around 13.7% YOY
- Brisbane median home price is now $550,840 - up by around 2% YOY
- Perth median value has come down to $520,519 - down by around -7.5% YOY
Adelaide, Hobart and Canberra all have seen increases between 4-6%, whilst Darwin has come down in median value by around 6.3%, mainly the result of the mining boom ending and people migrating back to larger capital cities.
Australia is and will continue to be the land of plenty for many years to come, simply because we have the space and many resources to look after ourselves and be relatively self-sufficient. We are enjoying the lowest interest rates Australia has ever seen, on top of continued economic growth. We have found creative ways to enable first-time property buyers to get into the market through stamp duty savings, home grants etc. and these initiatives will no doubt continue to keep home buyers entering the sector. We still are the best country in the world by far - 7,500 people per week moving here can’t all be wrong!
Please feel free to call me, Peter Vinci on 0438 041 111 and I will be happy to discuss or arrange for your new home loan.
As always, enjoy life, work hard, play safe and remember that we are always here to help you
‘Take the Confusion Out of Lending'
Peter Vinci - 0438 041 111