Ninja in a Blazer – 17th November 2022
November 16, 2022Ninja in a Blazer – 1st December 2022
December 4, 2022Why aren’t property prices going to stay down?
If we have a look at the current rental shortages, and rental rates going up.
There’s a huge influx of students again, although China has yet to increase their supply of international students as yet, possibly due to the fractured relationship between China and Australia, and possibly due to social persecution due to the start of the C-19 pandemic and the wariness of the potential for racial prejudice.
Couple this with the arrival of people with work visas once again and you can bet the housing shortages aren’t going to get better.
Yes, interest rates have gone up.
Borrowing capacities have gone down.
But people still need homes to live, so if a buyer was originally searching in Ascot, they might be now looking in Wavell Heights; if a buyer was previously looking in Wavell Heights, they might be now looking in Geebung and so on and so forth.
There are always buyers and we can see that in the last 50 years, there have been corrections along the way closely aligned with interest rate changes, but overall house prices have continued to go up.
PRD Nationwide chief economist Dr Diaswati Mardiasmo said the market would eventually adjust to higher interest rates and the long-term outlook for home prices was increased growth.
Much of that growth would be driven by rising migration, a soaring city economy and developers not building new homes fastest enough to meet demand…
“At the end of the day, it’s about supply,” she said.
Throw in the Olympics in 2032 and the current investment in infrastructure and I’m pretty confident you won’t be able to keep Brisbane prices down for too long.
Building costs are currently high, but as we know through the property investment cycle, we’ll see prices drop possibly as early as January next year, I’ve already heard of certain trades getting cheaper at already.
A good example of the interest rates having an effect on house prices is 17 Ossian St, Geebung with it having sold in June 2021 for $731,000; the automatic bank valuation (via RPData) is $860,000; however, it’s currently on the market for “Offers over $749,000”.
It came on the market at “Offers over $850,000”, then changed to “Offers over $799,000”, then it went to Auction, before its current price of “Offers over $749,000”.
Now, I don’t know the full ins and outs of the sale process or what offers have come in, so anything beyond the pricing is speculation.
