There’s been a lot of property market forecasting going on lately from a variety of sources, with a growing number of economists predicting that house prices are on the way up again. Indeed, we took a look at some of those numbers in ONE OF OUR RECENT POSTS, and how these forecasts are adding to the pressure on home buyers to purchase as soon as possible.
However, one forecasts that caught our eye recently would have given most home buyers an added sense of urgency in their property search. Guy Debelle, Deputy Governor of the Reserve Bank of Australia, was speaking at a conference of the Society of Certified Financial Analysts recently where he said that not only is a shortfall in housing supply “quite likely” in the foreseeable future, but that this would trigger a “larger price response” in property values.
Dr Debelle also said that whilst demand for housing would continue to grow, construction of new housing to meet that demand was likely to bottom out in 2020. One quote that would be of interest to anyone planning on making a move in the property market was “While the increase in supply has finally met the earlier increase in demand, demand will continue to grow given population growth, but supply is going to decline. So, there is quite likely to be a shortfall again in the foreseeable future.”
Some of the factors that the Reserve Bank has referred to in making this forecast were:
- The end of the recent upturn in housing construction numbers;
- The long lead times involved in constructing high-density housing; and
- The decrease in property investment numbers due to tighter lending rules;
If you’re interested in reading the whole speech, you can access it through the RBA website by CLICKING HERE.
When you remember that Melbourne’s population is now growing faster than any other city in Australia, then the drop in housing construction can only lead to one result…more buyers competing for the limited number of available properties, and recent history has shown what happens to prices when that happens!
Whilst the decision to sell and move on is not one that should every be rushed, the good news is that help with all of your real estate questions is just a phone call away, so feel free to give the helpful Customer Service team at Ian Reid Vendor Advocates a call on 1300 400 400.
You’ll also find lots of tips on how to maximise your result in our free booklet, “FATAL REAL ESTATE TRAPS EXPOSED”.