It is always prudent to keep the basics of property markets in mind in order to gain a better understanding of what factors cause changes. The economy is a fluid entity driven by many influences, and it is important to understand some of these in order to make informed decisions concerning the property market. Real estate agents especially need to be aware of the current trends and shifts in the markets and their varied influences and effects. Stated below are several key areas that push the Australian property market in new directions.
First, and most importantly, is the economy. The Australian economy is experiencing growth thanks in part to the high, offshore demand for our commodities. Our resources are boosting the economy by creating capital gain and new jobs. Because of this increase, employment is up and job participation has hit a record high, which will cause wages to continue to rise. Low unemployment is always a positive influence on a country’s economy.
Second, but closely related to the first, is inflation, which is presently under control. The Consumer Price Index is within the Reserve Bank of Australia's target range, meaning interest rates will not increase as quickly as they have in the past. Keeping inflation under control is very important for a healthy economy and prolonged growth.
The third factor is high population growth coupled with property shortage. Australia has one of the highest population expansions in the developed world, which is a key factor in the under-supply of homes in some regions. Construction of new housing is at the lowest it's been in thirty years because of how hard it has become to obtain approval and funding for new developments. This difficulty is causing a large shortage in homes, which will in turn cause a jump in rental rates and an increase in the price of housing. Those thinking of selling their homes can expect to sell for higher prices now than if there were a housing surplus.
Despite the property shortage, buyers will continue to enter the market, putting a high demand on real estate agents. We can expect to see many first-time home-buyers, who are trying to escape the escalating rental rates, investors, who are looking to gain from the rise in the market, Super Funds, who are now allowed to purchase property, and foreign buyers attracted by our current economic stability.
The last factor is our confidence. Whenever people feel secure and stable, their confidence in the property market increases. A booming economy inspires a feeling of well-being among the general populace, making them more willing to spend money. This is good news for the market as it increases the demand for property. This confidence is not likely to wane any time soon, and we can expect to see our economy continue to grow with the property market.
In conclusion, the Australian economy is experiencing great growth, which breeds prosperity and confidence that will lift the property market. With no foreseeable collapses looming, growth will continue into the next year and beyond.
Article written and supplied by Anna K. on behalf of Sell My Castle
Anna K. is a journalist from Brisbane,Australia. She writes for several blogs about finance topics such as real estate, insurance and several others which attract attention of many readers.
- Thursday 14 April 2011