The housing price has made a new record in Australia. On 16th April, Melbourne’s median house price hits $1m for the first time. Obviously, Australia’s property market is red-hot for investors all over the world. In this situation, people who have not got a house are anxious and worry about cannot afford a property in their whole life, while people who own a house are excited about the crazy house price. But here is a question that every curious about, what is ahead in the Australian Housing markets in the future?
A new report from ANZ bank may give us some insight.
The national house prices will rise to 17% through 2021 and keep rising in 2022
Almost all the banks predicted in the middle of 2020 that Australia’s housing market would remain depressed for the next year. Ironically, positive forecasts replaced negative forecasts in the latest report. ANZ senior economists expect the national house price will keep rising till the end of 2022.
At the end of this year, Sydney real estate market will increase by up to 19%, while the Melbourne market will follow up to 16%.
The speed of price rising will slow in 2022
Although the house price will rise in 2022, it does not mean the increased speed will remain the same. markets cannot go wild forever. MLC’s chief economist, Bob Cunene claimed that while Australian property prices meet the fastest growth in 32 years, the prices in the next year will not rise this fast.
We need to remind ourselves, even though the continued rise of housing prices is a foregone conclusion, impulsively shopping should also be avoided.
Bank interest rates will rise in 2022
The bank interest rate now is in a historically low position, which is also one of the reasons for the house’s rushes. A professional from the Australian financial system said that the RBA
will start to raise cash interest rates in mid-2022. This movement will likely make an influence on the Australian house market.
In fact, not only bank interest rates will change, but bond markets have also started to place upward pressure on yields. the cost of borrowing will be a huge concern for everyone.
There will be more investors than the first home buyers
People may not believe that investors have outweighed first home buyers in history, but the spread in market participation has never been this wide. More and more first home buyers found it hard to compete with house investors. At the auctions, investors are always willing to pay more than the first house buyers.
We all know that housing affordability is about supply, but it is also related to demand. The average percentage of investors is 27.5% nationally which means the barrier for the first home buyers is high. Between ridiculous high property prices and investors. The situation for the first home buyers is tough.
Building a new house becomes the best option for the first home buyer
there are three main reasons why building a new house is a better option.
First, comparing to buy an established house, buying a block of land and building your home is far less competitive. Building your home house can save your time spent at inspections, auctions, and negotiating with agents.
Second, savings and concessions like stamp duty and the First Homeowner Grant are available for the first home buyers. This clearly makes building a house the most cost-effective option.
Last, building a new house avoid you from putting more money into fixing the house in the next few years. It is a good feeling when after tired work and gets back home, everything is nice and new, so there is no work to be done.
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As a highly regarded property developer with prestige reputation, Sightstone development has a constant commitment to building dream houses for clients. With a deep understanding of different cultural background communities in Australia, Sightsonte always ensure the best service to our clients.
If you have any questions about building a new house and buying a new property, please feel free to contact us, we are happy to assist with any helpful advice.