Why The Real Estate Market in Australia is Booming
The Australian property market is experiencing a boom not seen in decades, and there are plenty of reasons for this sudden surge in property prices. Chiefly, supply and demand discrepancies have led to an unprecedented rise in the price of homes across the board, but also and especially in Australia’s capital cities.
According to a recent report released by CoreLogic, the residential real estate market in Australia is worth $8.8 trillion at the moment – that is an amount that is more than the Australian stock market (which is valued at $2.8 trillion), Australian superannuation ($3.1 trillion) and commercial real estate ($978 billion) combined. This is also an all-time high for the Australian property market in general. Even with this enormous valuation, CoreLogic predicts that the value of the residential property market is set to skyrocket even further, breaking through the $9 trillion barrier later this year.
Says Tim Lawless, research director at CoreLogic, “It won’t be too long before it breaks the $9 trillion mark. We’re going through a construction boom, and house values are rising very swiftly.”
While the rise in property prices has slowed down a little, cities all across Australia are still recording rises, with Hobart leading in the figures for the latest quarter, with prices increasing by 8.2%. Hobart is closely followed by Sydney, which had seen prices increase by 7.7% over the same period.
Add to this, the fact that the total number of homes listed in July 2021 was just over 27% lower than the five-year national average, with average sales for the month 42.6% above the average over the past five years, and it’s easy to see how supply and demand has had a hand in driving up the price of homes in Australia.
The Highest Value Markets in Australia
So-called “million-dollar” suburbs have increased vastly in Australia over the past few months, with no less than 218 suburbs being added to the prestigious list. In Sydney, 340 suburbs with houses and 79 unit markets now have a current median value of $1 million or more – that is 25.4% more than there were last year.
CoreLogic research found that 184 suburbs in Melbourne with houses and eight unit markets have a current median value of $1 million and more, which is 34.3% more than last year, while Queensland’s regional areas combined have a similar number of million-dollar suburbs compared to its capital city. In Queensland’s capital, Brisbane, 51 suburbs have a median house value of $1 million or more.
Regional areas in general are also showing significant price growth, though – 55 suburbs in New South Wales have a median house price of $1 million or more, which amounts to a 267% higher average than had been the case a year ago. Regional Victoria has 11 house markets with a median house value of R1 million or more, while this was only true for four house markets a year ago.
In Sydney, the eastern suburb of Bellevue Hills tops the list in terms of the value of property, with a median house value of a whopping $7,616,288. Brighton in Melbourne’s median home value of $3,316,986 makes it the most expensive suburb in the city, while Teneriffe in Brisbane has a current median house value of $2,063,937. Adelaide’s Unley Park has the highest median house value in this area, with homes here going for an average of $1,710,279. In Australia’s Capital Territory, the homes in Griffith have an average median value of $2,198,510.
Just one look at the numbers makes it clear that the rise in prices may serve sellers well for as long as there are interested buyers that can afford to pay the prices being charged for property. However, this trend cannot continue forever, as Eliza Owen, CoreLogic’s head of research, confirms.
“For first home buyers, who tend to be more price sensitive, higher house prices and the volume of suburbs becoming million dollar markets are likely building on the challenges already faced by these prospective buyers around home ownership and affordability. The latest ABS finance data reinforced this, showing April marked the third consecutive month of decline in finance secured for the purchase of property by first home buyers,” says Cowen.
Is now the best time to sell your home?
Many home sellers will want to take advantage of this boom in prices, and it is easy to see why. If there is a chance of making significantly more profit than was the case just a year ago, which prospective home seller would not want to jump on the opportunity? Does a property boom signal that it is time to put your home on the market, though?
When using a real estate agent to help you sell your home, they will take your personal circumstances as well as the way the property market is looking at a specific time into account. By undertaking a comparative market analysis of the home, real estate agents are able to calculate a selling price that guarantees a good profit for the seller, while also considering what other homes in the same city or suburb are selling for.
While it may seem like a good time to sell, a lack of interested – and wealthy – sellers will still mean that the home may spend some time on the market. If homeowners are looking to sell quickly, they will want someone by their side who understands how the local property markets perform, and has a good handle on what exactly interested buyers are looking for.
When initially interviewing agents to help you sell, it is a good idea to be completely honest about your expectations for the sale of the property, including what kind of profit you’d like to earn. A real estate agent that has been doing business in a specific city or suburb for a while will be able to advise sellers on an asking price that will ensure a sale, but also won’t mince their words about repairs and renovations that will make the property compare favourably to other homes in the area. After all, if sellers are paying a premium price, they will expect to be purchasing a premium property.
Ways to Sell Your Home in Australia
When trying to sell a home in a booming market, sellers should absolutely take heed of the advice an experienced and qualified real estate agent offers. Selling a home in the shortest possible amount of time requires sellers to pay particular attention to the way the home is presented in the online sphere, which is also the first place that prospective buyers will come across the property. Making an impression in this regard is crucial, especially considering that people looking to purchase a property will definitely do side-by-side comparisons while their on the property hunt.
If comparable properties in the same city or suburb outshine their own, the chances of potential buyers coming to see the home in person wane, which does not bode well for sellers that expect buyers to spend the proverbial arm and leg on a home.
Completing work on the home before the property is even photographed for the online listing is essential, as is using home staging and exceptional property photography to really make it stand out from the rest. Home sellers can also pay attention to things like lighting the home well and utilising the space in the home in a way that highlights its best features.
If all of this sends the minds of sellers reeling, the services of a good real estate agent will make the whole process a lot smoother. Not only do agents handle the admin associated with the sale of a home, but they also take the pressure off of sellers by also negotiating with potential buyers about the selling price. The advice a real estate agent provides is worth far more than the commission the agent earns when the home is ultimately sold, as sellers will quickly realise.
The Australian property market has seen unprecedented rises in the price of houses over the past year. Driven by huge demand among a limited supply, no less than 218 suburbs in the country now have a median house value of $1 million or more. While this is good news for property sellers, this rise in the price of property is unsustainable in the long run, especially as property becomes less affordable to sellers by the day.
While demand is high, though, sellers can take advantage of the boom by making sure their home stands out among the others that are vying for the attention and cash of buyers.
Using a real estate agent to help you secure a sale is the easiest way to ensure a quick sale. Real estate agents know how to make the online listing stand out, but also have access to a large group of potential buyers, making a sale – and a good profit – a certainty. Still looking for an agent to help you sell? Let Perfect Agent recommend an agent that knows how to get a home from “for sale” to “sold” quickly.