It seems today that every time you turn on the TV or read a paper there is some type of new explosive news about how the Australian property market is tearing towards a collapse, breaching the Bubble or some other type of doomsday prediction.
Alternately there are just as many people citing the facts that are Australian specific who are saying quite the opposite, the key component is, “Australian specific”
Our economy has always been very self sufficient and internally reliant as you would expect from a strong resource rich Country as such comparisons to other housing markets around the globe such as Ireland, Greece and parts of the United States i.e. Detroit really have little to do with even being mentioned in the same context.
The proof of this we have seen first hand during the GFC, We did take our share of the financial beating and super funds that were heavily invested in the world trade markets saw total and significant losses, However, as a Country, we came through strong.
Our housing market did suffer as you would expect when the fear of total financial meltdown and the end of days is upon us, we saw a significant dip in the price of property,
What should be noted is that the day before the GFC hit our property prices were reaching record highs as it is again today.
I suggest to take the time and have a look at ABC stats for yourself, If you trace the amount of growth pre-GFC discount the dip and continue on you will see that we are not in the centre of a bubble with out of control prices and Auction madness, but in fact we have corrected our selves back to exactly where we should have been in a growth sense if the GFC had never been.
As such we have seen some areas sky rocket in price and value, not because the prices are being pushed up, but because of coming back into line with what what was lost in “fear” topped with market growth being added back into the market.
We have a housing shortage in Australia primarily in the bigger cities such as Melbourne and Sydney this demand in the market is what is driving the prices up, This is a good thing, Personally i wouldn’t spend the money to buy an apartment in the centre of the city, the prices are to hi ha, I will invest in property in suburbs where the demand is still hi and i will see a great return over 10 years and i will lease a rental property to live in, in the centre of the city as that is my life style and now i am paying someone else’s mortgage for them. This is the cycle.
Personally i find the who subject in the media at the moment to be radicalised and the hot topic of the day, If we truly want to be worried about something to do with the increase of housing supply and population growth we should be talking about how we are going to deal with the issue of infrastructure such as congestion on our roads and the lack of water that is needed to supply them.