While real estate in Australia has certainly swung in the favour of sellers, what are considered to be the key ingredients for a healthy property market?
On a national scale, home values are currently up over 20% when compared to the same period just twelve short months ago. Considering the change in spending habits, shortage of building materials and just about everyone in the nation reevaluating the quality of their lifestyle, buyers in particular have stimulated the Australian property market in surprising numbers.
While this spells good news for most sellers, skyrocketing house prices are linked to a number of factors such as record low interest rates and a lack of properties for sale to meet buyer demand. Relief may soon be on the way through, with the latest forecasts combined with industry speculation having hinted that property prices may soon begin to finally stabilise, with first home buyers in particular feeling cautiously optimistic about finally getting their chance to dive into the world of real estate.
However, does the prospect of house prices potentially falling translate to a healthy property market? Not quite, but there are a few key signs to be on the watch for as we transition into the new year.
What Factors Indicate A Healthy Property Market
Regardless of whether you identify as a buyer or a seller, understanding the health of our national real estate market is a must if you want to make informed and educated decisions in the world of property.
With signs that the tide is starting to turn in favour of buyers within the next two years, it’s important to remember that balance is often what determines a healthy property market for all members involved – but what factors actually determine this balance?
A Thriving Economy – Like it or not, the economy makes the world go round. Increasing production and manufacturing, more employment opportunities, and rising activity in areas like construction, transport and tourism are all good signs that an economy is ticking over at it’s best, which in turn flows into the nation’s property market.
Funding Incentives Reduced – In a first world nation like Australia, state and federal government incentives quite literally give people money as a means to stimulate a particular sector or industry. One such example of this is the now retired HomeBuilder scheme, which was designed to boost both construction and real estate during the height of the pandemic.
Rental Prices Rise – One of the ways that a property is valued is based on the rental income it can generate. If rental vacancies rise, as we’ve seen in Melbourne thanks to the lack of tourists and international students, the property won’t be earning an income. As such, owners have to lower the rent to attract a tenant. When rents rise, it’s a good sign of a healthy property market.
Less Available Land – Depending on the area, raw land without any existing dwellings can be an indication of how healthy the local property market is. In residential or urban areas, vacant blocks are a sign that developers may not be as busy or well funded as they should be, or that new builds aren’t being favoured. Healthy markets have less land opportunities.
Days On The Market – If a property is listed for sale and sells before it even hits the real estate websites, it’s a sign that there’s a supply issue. If a property takes too long to sell, it’s either overpriced, or that there’s simply too many dwellings to choose from and not enough buyers. While there’s no right or wrong answer, days on market gauge real estate market conditions.
Should you be looking to sell your home or purchase a new one, enlisting the services of a free property advisor like ESPA can often be a game changer. As an example, your advisor would likely research the property, local agents, check the zoning, evaluate market conditions, and communicate clearly with you regarding all of your options – but where do you find one?
Take The Stress Out Of Selling Property
As a completely free service, Emergency Services Property Advisors provide property advisor services to Police, Fire, Ambulance and S.E.S personnel and their families right across Victoria.
Luke and the team at ESPA are passionate about providing support to some of Australia’s most valued public servants. Along with key industry insights, ESPA also works with a broad range of service providers linked to the real estate industry such as conveyancers, trades, legal practitioners and mortgage brokers.
If you are an emergency services worker looking to potentially buy or sell property in the future, please get in touch with Emergency Services Property Advisors today to discuss how we can turn your real estate dreams into reality, or call Luke directly on 0414 757 705.
