Recent research by Swiss-based Bank for International Settlements has cast a very interesting light on the Australian property market. For example, did you know that Australia property prices have been in an upward trend for the last 55 years? Were you aware that average up cycle and down cycle lasts on average 13 years? However, while the report covered 47 different countries it is the phenomenal success of the Australian property market which is currently a very hot topic.
STRONG ECONOMY
The Australian economy was one of few able to avoid a recession in light of the 2008 worldwide economic downturn. When you consider this was one of the worst downturns in living history, with many countries still suffering the after-effects today, it does put into focus the strength of the Australian economy. One of the main reasons why Australia has been so strong is the expanding mining industry which has to a certain extent been complemented by the oil and gas industry.
We know that there has been enormous Chinese investment in the mining industry and this investment has changed communities and created untold demand for property.
FOCUSED AUSTRALIAN HOUSING MARKETS
We all know the landscape of Australia and the long term focus on the likes of Melbourne, Sydney, Canberra, Brisbane, etc. As local employment markets are extremely focused and intense this has created excessive demand for property in and around those relatively small areas. Despite the fact many so-called experts have called the “top” of the Australian housing market on numerous occasions this has been to no avail. There has been a slowdown in house price growth, the authorities will continue to use interest rates to control demand but there does seem to be a strong core interest in Australian housing stock.
OVERSEAS INTEREST
Over the last few years politicians have tried to suggest that overseas investment in the Australian housing market has pushed prices above and beyond attainable levels for first-time buyers. Despite the fact the country has benefited enormously from massive overseas investment politicians were not against playing the culture card. However, an official government report confirmed that overseas investment has had a minimal impact upon Australian housing prices.
While this did not stop the authorities from introducing restrictions and barriers to entry for some overseas investors looking to acquire Australian housing stock, it did again confirm the underlying strength of demand for Australian property. Record investment by Chinese companies in the mining industry may have peaked in the short term but many Chinese families are still looking towards Australian houses and sending their children to experience overseas education.
A PHENOMENAL PERFORMANCE
There is no property market in the world which can match the 55 year upturn for the Australian housing market. While house price growth has slowed in some areas of Australia it is still in positive territory and there is every chance that this upturn could have further to go. Critics would suggest that the mining sector helped the economy to avoid a recession back in 2008 but this is really just the tip of the iceberg. A well-managed immigration system, focused intense employment hotspots, relatively low interest rates and good management of the economy have all come together to create a unique situation which has lasted for many years.
Source: https://www.propertyforum.com/property-in-australia/australian-house-prices-strong.html