It is with great pleasure that I report to you on what is already shaping up to be a year of new opportunity and great growth for our local and national Real Estate markets. I know it’s an early call – but I can quite confidently say we couldn’t be more ready for it.
I hope some of the identified factors below explain some of the movement that we have recently experienced and are about to experience, especially on a local front. It is important to keep in mind that in reality, each of these factors do not influence house prices in isolation, but rather they work together as a combination; often counter balancing each other to some degree.
So, what is it exactly that’s got me feeling so good about what 2020 has on the cards for us you ask? Well, a couple of things…
As you can see in the chart above, the housing market has quite literally made a ‘bounce back’ in recent months. Auction clearance rates picked up by an astonishing 65% – 75% towards the end of 2019 and the total number of auctions held has increased as a whole. We have seen a number of new listings on the market as overall price increases have encouraged sellers to enter the market.
Home price growth – Stats
Sydney 7.9% pa ( 5 years 24%)
Melbourne 8.2% pa (5 years 32%)
Interest Rates – All Time Low
Interest rate cuts have had a significant impact on property price rebounds in all markets. The Australian Prudential Regulation Authority’s loosening of lending standards has boosted borrowing capacities and improved affordability within the market. This has undoubtedly been a significant driver for recent property demand.
Current Interest Rates
NPBS 3.19% ( real deal P&I)
Westpac 3.28% ( Flexi First )
Population Growth
One thing I often get asked is what other external market factors affect property market growth? The answer is never as black and white as people want it to be. But there is one thing that remains constant; high demand drives higher prices.
The simple ol’ supply and demand theory you learned about in year 8 economics. Newcastle has experienced a tremendous amount of growth especially in the last decade – population growth certainly drives the supply and demand pendulum and can certainly be proven when we look at the stats.
According to research and data by World Population Review, Newcastle’s population is expected to increase by 14.97 percent by 2036. This is a promising figure of its already 450,360 population count.
Author : Scott Walkom, Director of Walkom Real Estate
Email scott.walkom@walkom.com.au