Price Bubble or Housing Supply Shortage?

You’d be forgiven for being confused about the state of the Australian housing market currently, with some experts predicting a major downturn of property prices, and others saying that there’s no house price bubble.

In our opinion, we don’t think that the market is over inflated and don’t think that prices will slump like they did in the US during the GFC. According to our research, rather than a price bubble, Australia’s problem is more to do with lack of supply, and demand pushing prices up. Cost of living is a factor of course, but with housing in shorter supply than the demand for property, it pushes prices up until there is enough housing to cope with the demand of buyers.
 
It’s economics 101 really. But don’t despair, because all is not lost; it just takes more careful consideration when looking to buy a property. Supply is short, so the first thing you need to do is be prepared before you go in. Make sure you’re ready to buy by having all of the financial and logistical areas organised, so that when the right property comes up, you’re ready to pounce. Buyers and sellers will both want to negotiate, so be prepared and research ways in which you can achieve your goal.
 
The Australian housing market is going to stabilise at some point, and with interest rates holding firm again this month, it may be time to start considering your options if you want to get into the market. Supply will one day catch up with demand in New South Wales and the rest of the country, but no-one ever really knows what the future holds, so speak to your financial and property advisors about what your viable options are.

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