Every industry behaves like a living organism due to the fact that it constantly evolves. Sure, there are some periods of stagnation, but they are usually followed by either growth or decline. Same thing goes for the Australian real estate market. When it comes to the overall situation 2016 was a good year for people in the real estate industry, a tad better than the previous 2015. Seeing how we’re currently approaching Q2 of 2017 it might not be a bad idea to see where things currently stand. This might give some realtors-to-be a hint of what to expect, should they enter this market in the next few months.
1. Rising number of Chinese investments
If there is one thing that can be said about the early 21st century, it is that it signifies the rise of China as one of the world’s greatest economic superpowers. This can be seen in Australia as well, seeing how the value of Chinese investments in Australia is currently at its highest point since the global financial crisis. In fact, Chinese investors seem to be obsessed with buying Australian property, seeing how it’s incredibly cheap according to their standards. Namely, a median apartment price in Shanghai costs around 25 percent more than its Sydney counterpart. This trend is expected to keep heading on an upwards spiral in the future.
2. The issue of housing affordability
One of the greatest problems that the housing market is facing are the young homeowners (mostly Millennials) who are currently more inclined towards renting. This trend yields them much greater flexibility, which is definitely a huge plus for someone who is expected to change 4 jobs by the time they are 32. Saving for a home in that kind of economic situation might seem a bit too risky for them. Still, according to some estimates, this is expected to change in the nearest future, along with the stabilization of the economy.
3. Commercial property
When it comes to the issue of commercial real estate, things tend to get much more complex. Still, revenue sources such as hotels and leisure venues are marking a steady growth and the same can be said for industrial, warehouse and agribusiness structures as well. Nonetheless, this doesn’t have to be the case for the whole of Australia. Regardless, Sydney remains a top property performer when it comes to the overall ROI. The reason behind this is its almost unprecedented low vacancy rate (at least on the Australian soil).
4. Drop in properties on sale
Finally, from everything we could have seen this year, there is a steep drop in the number of properties for sale currently on the market. Even people who have previously expressed some desire to move into a smaller place are now rethinking their decision. As an alternative, they are much more likely to take renovation loans and try to adjust their home to their current needs. Same goes for the apartments, which might slow down residential development; with the exception of foreign investors in this field, like the aforementioned Chinese.
Conclusion
At the moment, the real estate situation in Australia seems to be quite uncertain. While the growth in the area of commercial property does look slightly better, the situation in the residential field of the industry seems to be in either state of stagnation or slight decline. For those who are considering whether or not to invest, now is the perfect time for them to make up their mind. Sure, 2017 seems slightly more optimistic than 2016, but there is no guarantee whatsoever that this trend will carry on to the next year as well. In other words, sooner rather than later seems like a sensible strategy to follow in this situation.