Contrary to what a lot of people may think (unless you are trying to buy!) property prices across all capital cities (except Canberra) have been increasing. With some capitals such as Brisbane and Perth really outperforming. Both Brisbane and Perth showed annualised growth rates of 16.8% on the July months figures. This is back to near boom times (see diagram 1 from Property Update).

What is driving the market?

A combination of strong demand and a severe lack of supply has been driving prices up. This is also pushing rents up as well. (More about that in the next episode) Demand has greatly increased due to interstate migration. It looks to get even stronger as the government announced in May 2023 that it would increase immigration to Australia for skilled migrants and students to the tune of nearly 400,000. Even without those people supply is tight so things appear that they will just get worse.

Supply is at an all-time low. There are not enough houses to place everyone and with a huge amount of new people about to enter the country, it appears that things will just get worse.  To make matters even more dire, there is no new housing coming onto the market because people are not so frightened of building.

The prediction is that property prices are going to increase at an even faster rate if interest rates remain on hold. With build times coming down to normal levels and the supply of product also back to normal, it is a very good time to build at the moment as there are some great deals to be had a land and building. It is now at a point where you can build new cheaper than you can buy something second hand.

There is some great money to be made in building a new investment property at the moment.

 

Change in Dwelling Values
Change in Dwelling Values