How low housing supply can push up prices

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Property market basics

It one of the most basic rules of economics, particularly in property – where demand is high and supply is low, prices will rise. This is something we are experiencing at the moment in the property market in Australia. Interstate migration is led by people being attracted to the financial and cultural opportunities of the city, and international migration (particularly in Melbourne and Sydney) is steadily increasing. This all leads to an overall population growth to major cities.

 

Which Australian markets to watch

Against increasing demand, it is predicted that the low supply of housing in many Australian markets will result in prices rising – with some major cities forecast to increase by up to 20% over three years to 2022. The sharpest rise will be found in Brisbane (20%), followed by Adelaide (13%), with Sydney (6%) and Melbourne (5%) showing significant increases. Luckily, at Reventon we are champions of purchasing a property in a high growth area that is best for your financial plan – not necessarily the property next door that you can keep an eye on, so there are plenty of exciting options for would-be investors.

 

Consider property rental prices

Rental prices are typically set by a number of factors. Many of them are the same as what might drive up a property purchase price – infrastructure investment, “live-ability” of a suburb, and supply and demand. We anticipate rental prices going the same way as home purchase price tags in the areas marked for growth, which is good news for people with investment properties looking to maximise their income through rental.

 

Where should you go from here?

Significant price rises for people who already own a property is good news. It means their investment is growing, and many people in high growth areas will reap the rewards of property ownership when it comes to achieving their financial goals. If you don’t own a property yet, now is the time to start seriously considering your route to home ownership. If you can afford to, its time to get the ball rolling by shopping around for the best mortgage deals and planning your potential location. If you’re not quite there yet, it may be time to consider your financial planning targets and techniques so you can save up for that all-important deposit.

 

Get professional support

Buying a property is of course possible to do without the help of an expert. But, a professional will be able to support your financial planning, do the hard work of finding and securing a mortgage deal for you, and even be able to advise on the best areas that are set to rocket in prices so you can maximise your investment. At Reventon, you can begin all of this with a free, no obligation consultation with one of our experts. You’ll receive a personalised investment plan, and support every step of the way on your wealth-building journey.

Book your consultation now


 

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