Real Estate Buying Behaviors of Australians
The real estate industry in Australia has been booming for many years due to rising demand for properties. This is mainly due to investments from foreign nationals, especially Asians, who are aggressively buying real estate in the country. However other factors are also responsible.
A recently published report shows that housing prices have grown steadily over the past five years despite turbulent economic conditions. Government incentives and falling interest rates are also factors that motivated homeowners to buy properties. Commercial property prices on the other hand have not risen in the same manner.
Expected Real Estate Trends
While it is difficult to predict the markets in the long run, data from various property listing and urban development sites shows some common themes in Australian Real Estate buying behaviour. These include the following.
The Housing Markets Will Cool and Prices Will Begin to Stabilize
After the 2008 real estate crisis, the Aussie government undertook measures to support and boost the real estate market. Interest rates were lowered and the government started providing special, low-interest loan programs and grants for new home buyers. For new home buyers, the government was granting up to $21,000 to buy new properties. As the grants decline, the incentive to buy new homes will be gone.
Moving Out From Urban Centers
In the past ten years or so the demand for property locations has also shifted. Today, the majority of Australians prefer homes located in the suburbs and away from major urban centers and downtown area.
Planned developments in the suburbs have more parks and other amenities while providing a peaceful environment which is preferred by a majority of homeowners. Due to better infrastructure, it is also easier to commute back and forth from work. Improved access to offices, commercial centers, medical and educational facilities while living at the edge of the city has caused this shift in demand.
Apartment Prices Will Drop
People preferred to buy apartments so that they can be close to city centers and have quicker access to work and education. As cities are expanding and improved transport has made it easier for people to travel from one place to another, we will see a decline in demand and prices for apartments.
Demand for Solar Homes Will Rise
Technological advances in solar panels and consumer demand for clean energy will see a rise in the price of homes equipped with solar panels. Properties built at angles that allow plenty of sunshine at the roof will see a rise in prices.
Foreign Investor Holdings will Drop
A major portion of the boom in Australian real estate markets was due to investments from Chinese and Japanese investors. The Foreign Investment Review Board (FIRB) found that the number and value of investment for residential properties has been on a decline for the past two years.
FIRB introduced application fees in 2015 and also implemented an intensive compliance regime in 2016. Both these measures are considered responsible for the decline in purchase applications by foreigners.