Policy failures see houses become unattainable for young Australians, minister says
Australia’s booming house prices are the result of the government’s failed policies, with the younger generation now...
The success of the local industry is a crucial indicator of how property prices will change, one of the country’s most-lauded buyer’s agents has advised investors.
Simon Pressley earned a place in the Real Estate Institute of Australia’s Hall of Fame in 2015 after winning national and state awards in three consecutive years.
Speaking on The Smart Property Investment Show podcast, he explained how Western Australia’s mining boom at the start of the millennium correlated closely with the housing market.
“Between 2002 and 2007, ’s median house price grew 184 per cent,” he said. “But between 2012 and 2017, it grew just 9 per cent. We probably won’t see that kind of growth again.”
Mr Pressley, who is the managing director of Propertyology, advised investors to focus more on the local, rather than national, economic situation.
“During that period, Treasurer Wayne Swan would remind us in every press conference that we had a two-speed economy,” he told host Phil Tarrant. “Parts of the property market benefited from the natural resource sector, but our service sector was in the doldrums. Mining was just one industry.
“For each location, consider what the most important sectors to that economy are. Form an educated view.
“Each industry’s outlook will provide a foundation to warrant whether it’s worth drilling any further down to consider investing there or not.
“In the last five years, we’ve deliberately followed the money trail, such as tourism, agriculture, the international student market or parts of our manufacturing sector.”
Mr Pressley was talking on the subject while revealing his top 10 biggest market influences. Credit policy, the state of the construction industry and political leadership were other vital indicators as was affordability and government incentives.
“Affordability showed up a lot a couple of years ago during the Sydney and Melbourne boom. We saw a big shift in internal migration away from expensive cities towards more affordable locations. But it can also affect market downturns, too.
“It’s basic logic, but the more expensive something is, the further it can fall.”
“And when prices increase at a rapid rate, state governments will often say, ‘Well, now’s the time to throw a stamp duty concession or something like that in to help get people into the market’.”
To hear Simon Pressley and Phil Tarrant discuss the top 10 in full, click here.