- August 23, 2018
- Posted by: Rogers Property Group
- Category: Australian Property Market, International Property Market, Latest News, Queensland Property News
As I have said in the past, property is like any other asset class that you would like to invest in. They all work around a simple economical equation on Supply vs Demand.
Increase in Demand + Decrease in Supply = Increase in Price
Real demand in property is create by population growth. The more people wanting to live in an area means the more houses are needed. If there is not enough houses to go around (the market is undersupplied) people will pay more for what they want.
What is happening in Perth and Darwin at the moment is that the population growth in these cities is fairly slow. Especially when compared to other cities such as Brisbane, Sydney and Melbourne. While there was increase in the housing values of Perth and Darwin a while ago developers flooded the market through this period in order to make profit. This oversupplied the market. Furthermore, approvals in these 2 cities continue to track ahead of population growth – which means – oversupply.
It is going to be very hard to get a value increase in either of these two markets until demand and supply turn around.