Myth busting: Is the property market cyclical?
Do you know what the primary dictator of property price movements is? ...
In what’s a far cry from the large drops seen in the property market just six months ago, a property researcher believes parts of Australia will see a boom by Christmas, growing as much as 20 per cent over the next 12 months.
CoreLogic’s national home price index showed a 0.1 per cent fall last month, but that was entirely driven by a 0.9 per cent slide in Melbourne and 0.3 per cent decline in Sydney.
Outside those two big cities, the other capitals posted increases, as did most markets outside the metropolitan areas.
In general, houses outperformed apartments, with prices steady nationally last month versus a 0.3 per cent fall for units.
Unit rents have also dramatically underperformed house rents during the pandemic, slumping 3.3 per cent nationally since 31 March, versus a 0.4 per cent rise in house rents.
Propertyology’s head of research, Simon Pressley, points to the shortage of available supply as well as strong buyer activity, which will likely lead to strong growth in the asset class.
Mr Pressley said research conducted in house suggests the property market is already booming in locations such as Noosa, Canberra, Orange, Dubbo, Burnie, Bendigo, Mildura, Mount Gambier, Coffs Harbour and Karratha.
“The current list of boom property markets is likely to expand significantly within just a few months. Australia is on track for its first widespread boom era since the turn of the century,” Mr Pressley said.
The property researcher explains investors that are waiting for the “market to turn” could miss out.
“There is a five-month lag between the day a property contract is signed until the transaction is captured as part of published median house price movement data. But the world has changed so much in the last five months,” Mr Pressley said.
“By the time the Australian public has access to data that alerts them of the fact that real estate prices are seriously on the move, they will have already missed out on double-digit growth.”
Mr Pressley believes this strong growth is not limited to just a few select areas.
“The current list of boom property markets is likely to expand significantly within just a few months,” Mr Pressley said.
“Australia is on track for its first widespread boom era since the turn of the century.”
“The buyer frenzy will be akin to seagulls fighting over a chip. Folks, get your finances organised and beat the next flock of seagulls,” Mr Pressley concluded.