Young Australians are increasingly abandoning the dream of home ownership as skyrocketing house prices and stagnant wage growth put an end to the once-conservative dream of a quarter-acre block.
Professional property valuers believe Australia’s house prices will continue to rise despite already severe affordability concerns, according to new research from the Australian Property Institute and The Search People.
According to a survey of 500 property valuers who spend their days evaluating market inventory, more than half believe Australians are overborrowing just to get into the market.
“High demand is being fueled by a combination of record-low interest rates and buyer apprehension about investing in other alternatives. This, combined with a scarcity of inventory, creates a sense of ‘fear of missing out’ among many buyers “Rafe Berding, CEO of real estate technology company The Search People, agrees.
“As a result, properties are being snapped up for significantly more than the asking price in some cases within moments of being listed.”
Despite recent record price increases – during which property values increased at the fastest rate in 33 years – 63 percent of appraisers believe the market will continue to grow.
“While the majority of respondents believe the Australian property sector is about to boom, 59% believe Australia is currently experiencing the beginnings of a property bubble,” Mr Berding explained.
Amelia Hodge, chief executive of the Australian Property Institute, said the Australian property market is currently so hot that institute members are experiencing capacity constraints as a result of the high volume of interested parties.
“With record low interest rates, we are seeing an increase in buyer activity,” she said.
“This is excellent news for Australians selling property, particularly as values in the majority of sectors continue to rise and selling times in the majority of capital cities continue to decrease.”
Ms Hodge advises prospective buyers to get their financial ducks in a row before entering the market.
“For property investors and buyers, we recommend completing your budget, finance, and valuation research as soon as possible to ensure you can act decisively and quickly on opportunities,” she said.
“Always ensure that this is backed up by an independent valuation conducted by a suitably qualified property professional.”
Australian Capital City Property Prices April 2021*
|City:||Quarterly Change:||Median Value:|
|Sydney||+ 8.8 per cent||$950,457|
|Melbourne||+ 5.8 per cent||$744,679|
|Brisbane||+ 5.6 per cent||$558,295|
|Adelaide||+ 4.3 per cent||$492,285|
|Perth||+ 4.2 per cent||$513,598|
|Hobart||+ 7.0 per cent||$561,254|
|Darwin||+ 5.8 per cent||$465,976|
|Canberra||+ 6.7 per cent||$734,107|
|National||+ 6.8 per cent||$624,997|
*CoreLogic Hedonic Home Value Index 2021. Median values include both freestanding houses and apartments.