Future of residential property market in Australia
Most of us think that property market is cyclic . Well, i think rather than talking about the cycles we should be talking how demographics and economic policies are affecting the property market. Few of the factors to consider to see which way the market will head:
1. Changes to negative gearing
2. Changes to super contribution
3. Changes to government pension criteria
4. Average increase in wages as compared to the property prices
5.Job creation and the areas getting affected by it.
6. Changes to rezoning policies of the councils .
7. Changes in the preferences of the first home buyers and retirees.
8. RBA's policies regarding interest rate change.
Property market is always dependent on the money supply which is dependent on the cost of borrowing. Low rate of interest spurs the building activity and the demand and higher rate of interest does the opposite. In a nutshell, we have seen the lowest possible interest rates for mortgages ,hence the increases are expected in near future which will be gradual and then clearly visible. People will prefer better infrastructure than the size of the house or type of the house. Bigger and young families will shift towards outer suburbs and mature families will get closer to the cities.