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The Great Riddle Called Population Growth
Wargent attributes population growth in Western Australia to the mining sector. He further feels that so many people added over the last year have helped in retaining the property momentum.
Population spike creates housing undersupply
After all, 400,000 people added to the national population are bound to create shortage of dwellings and all of us understand the connection between undersupply and high prices.
House prices have not shot in real terms
Two important points to ponder though- wages (relative purchasing power) have increased thus bringing down property prices in real terms. Second, interest rates are so low that borrowing is no more an unaffordable idea (if rates stick to their present value)
Household incomes have outperformed house prices
Household income, reports Wargent, has overperformed Sydney property prices and easily so. However, all this might change shortly as low interest rates, perennial undersupply and strong investor activity (domestic as well as overseas) will force house prices through the ceiling.
You can read the original article here.
Factors called “average home sizes” and “higher life expectancy”
We cannot arrest the rise in Sydney population because interstate migration will only increase as people get besotted by the idea of living in Sydney. Higher life expectancy will push up the gulf between birth and death rate even further. In light of these facts, I think we need to take a closer look at two factors.
Do you agree Sydney will need 100,000 more homes in the next 20 years (Urban Taskforce estimate)?
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