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A Perfect Storm Of Positive Indicators

A Perfect Storm Of Positive Indicators

It’s been a long time since the underlying indicators were so positive for real estate buyers, notwithstanding higher interest rates. In many ways it’s a perfect storm for property investors, although not so good for households who rent. In simple terms, there’s a serious imbalance between supply and demand which continues to become more pronounced.

Australia has just recorded the highest population in 20 years, boosted the highest ever levels of overseas migration. At the same time, the nation is not building enough new dwellings, with building approvals in steady decline for the past three years.

Australia has shortages of residential land, of houses, of apartments and of homes available for rent. Politicians have few ideas on how to fix this problem of shortages of everything important in real estate. Myriad problems in the building industry mean it’s not possible to build enough new dwellings and government targeting of Airbnb as a convenient scapegoat will do little to improve the rental shortage. Prices and rents will continue to rise for the rest of 2023 and into 2024, creating a climate that favours investors, while being bad news for tenants.

Written by Terry Ryder

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