Routers Poll results reveal that the red-hot Australian housing market may heat up by a considerable level this year as well as in the coming year. The main contributors to this condition are the fallen borrowing costs and the reduced availability of homes.
Right since the pandemic started hitting the world hard, the Reserve Bank of Australia brought the interest rates to a record low level. As a result, the financial system got flooded with cash that worked like a potential trigger for the most expensive real estate market in the world.
House prices rose to almost double nationwide after the financial crises of 2007 to 2009, especially in Melbourne and Sydney, the two most popular cities in the country.
The accelerated trends in the housing market have created a big difference between people that already have considerable savings to invest in property and those who are still struggling hard to enter this market.
The low interest rates and few other forms of monetary policies have recently reduced the mortgage rates by a considerable level. The pandemic led effects made housing prices more affordable for few buyers, the ones that are already eager to take advantage of such situations.
As RBA already stated that the interest rates may rarely rise from near zero values up to 2024, the housing market prices can surge by almost 17% by the end of this year and by 6.2% in the coming year.
The expert forecasts show significant upgrades of 10.5% despite no immigration on virtual grounds this year. There are so many reasons behind why the prices will keep on rising and may even outstrip the general inflation. Even when the transactions are expected to be relatively low, only two analysts show a decline in prices for the year 2023.
The interest of buyers towards detached houses is still rising, and people have started making savings to fulfill their dreams. However, on the other side, the property supply in the market is considerably low that further leads to outstripped demands in comparison to supply.
During surveys, experts asked few important questions about affordability to the real estate market analysts. Observations reveal that the concept of affordability may worsen in the coming two to three years.
In case if housing prices keep on growing high, it may get difficult for the buyers to choose an affordable home in the near future. To ensure that people get housing units at affordable prices, it is first important to handle supply requirements.
Housing unit prices in Melbourne and Sydney, which make up almost 43% of the country’s GDP, may rise by almost 15.5% and 20.3%, respectively. Furthermore, in Perth, Adelaide, and Brisbane, the prices may increase by 12%, 14%, and 17%, respectively.
Although the world economy was greatly affected by the coronavirus pandemic with high unemployment rates and crises in the housing market, the economy may boost again in the coming months as people are now ready to invest in their dream homes.
https://www.straitstimes.com/business/property/australias-red-hot-housing-to-get-hotter-affordability-to-worsen-poll
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