It’s true that the Australian property market has been growing and Sydney particularly has seen an abundance of growth in recent years. This is great news if you’re planning to buy or sell. What can we do to determine how long this trend will last? The Reserve Bank of Australia (RBA) published the results of their quarter on Monday, with expectations for house prices in Sydney and predicts that 2018 will be a much more successful year than in 2017.
The Sydney market for properties is performing extremely very well. In the Sydney Morning Herald reported that the median home price in the most populous city of Australia has increased at an average rate of 10% each year for the past 10 years that’s amazing. But what’s driving this increase in value? Learn more about it here…
Here are some reasons for why the value of homes in Australia is rising:
1. The economy of Australia is robust
It’s not difficult to see that Australia has been doing exceptionally over the last few years. In the Business Insider reported that we’ve seen an economic boom and low unemployment from 2011 which is good for the economy and housing prices. More robust economies translate to increased demand for housing which results in an increase in the value of property.
2. Rates of interest are low
The current time is one of the most favorable interest rates in recent times and rates beginning at 1%. This isn’t as high as historical averages, which were higher than 6percent. Although this can be considered a good thing (because it will mean less monthly payments) however, it could make it more difficult for those who want to save cash to make a deposit, as there’s less motivation to save. However it is true that the RBA forecasts the interest rate will stay relatively low for the foreseeable future, which is good news for those who are looking to get a loan to finance an investment property.
3. The Australia population is growing. Australia is growing
Over 270,000 people emigrated from Australia which has affected the cost of housing because there are many more buyers that can increase the cost of homes. If you take into account the temporary migrants (such as students from abroad) the numbers go more! In the moment the current increase is 1percent (which means that we’re adding around 350 people every day). This isn’t enough to make up for the number of houses which are being destroyed, but it can contribute to the rise in home prices. There is ample evidence to suggest to suggest that population in Australia is increasing, and it is likely to continue to play a role in the rising prices for houses.
4. The construction of new homes is on the rise.
There’s been an increase in the development of new properties across Australia and in particular in Sydney because of policies such as “Sydney 2030 which aims to ease regulations on planning and allow greater density of construction close to transport centers. Although this could lead to cheaper homes being constructed (because there’s more supply) but it could also raise prices due to an increased demand. But, the result is a positive thing : a wider range of homes at various price levels, and plenty of options for potential buyers!
The price of homes in Sydney is increasing However, this isn’t an easy place to be in. For those who want to navigate through this market without difficulty it is Biownr’s Biownr Platform can assist. It offers you accurate and reliable data to help you make informed choices about your home purchases or investments at any point of the process, from choosing when to buy an apartment and which area is most profitable for investing for investment purposes.