How The Current Market Will Affect The Future Prices
The economic crisis caused several things to happen which will have an impact for property investors for years to come. Changes that have and will affect house prices in the next several years:
- Government First Home Owners Grant
- Substantially less land being developed and released
- Property prices will go up and this will impact negatively on first home owners meaning demand for rental properties will go up
- Interest rates will increase meaning that less people will be able to afford to buy and they will have to rent
- Property investors will have more difficulty getting finance so only those in a good position will be able to continue purchasing (other alternatives have previously been discussed: private lending, buying partnerships)
- Unemployment
- Mining towns needing to be re-populated as growth in the mining sector grows again
These points most certainly appear to be on the negative side but from an investors point of view they are strong points for building a property portfolio.
Land release is a concern for State Governments because lack of housing does bring with it a lot of other problems as well. One of them being that ‘supply and demand’ forces up the house prices and new home buyers will find it so difficult to get into their own homes. There has even been talk of Governments selling some of their own state owned land for housing developments in an effort to fast track land release.
So what does this mean for the property investor?
All this will bring with it some excellent property investment opportunities but just the same, detailed research will need to take place to ensure growth in the area, community services and good rental returns for each property along with other factors relating to each property.
Filed Under: Property News
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Hi Tracey ,
The points you have made are excellent . My view is this will lead to what I call a divided society. Those who own and those who rent.With less crossing between . Australia is building WAY too few houses and population is booming in both absolute and percent terms .property will boom , only restained by higher interest.!
Hi Tim
I totally agree, it can be seen already in Brisbane with more people coming here each year and less houses being built each year.
Thanks Tim