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Earlier this month Professionals held their Annual Conference where we were lucky enough to hear from a variety of fantastic speakers about real estate, buyers, sellers and “the market”. It is interesting to gain some insight into the views of others who work on the periphery of the property industry.
Michael Pascoe spoke generally about the economy. It was very interesting to hear that all the “doom and gloom” presented to us by the media is only partially true. When looking at Mr Pascoe’s statistics we, as a country, are doing very well in comparison to the rest of the Western world and Europe, in particular. He also spoke about housing affordability and made comment that our housing market is quite affordable.
Kyle Evans from the company RP Data spoke about the market, prices and performance, in general terms. RP Data is the biggest provider of property information to property industry (including real estate agents, banks, governments and consumers). Mr Evans reported that, from statistics, the market appears to be rising – ever so slowly – which is good news for sellers, and a great opportunity for investors to either enter the market or increase their portfolio.
Another industry commentator, Michael Matusik, has also recently published a blog arguing the same point about housing affordability.
According to new figures released by the ABS in late August just 14% of Australians household income is spent on housing costs. This has changed little in the last 15 or so years. Ten years ago the average cost of housing was 12% of income. Little change has been seen regarding tenure over the past decade.
Conversely the first home buyer segment is currently paying 21% of its household income on housing costs. In 2005/2006 this group paid 25%, on average, on housing. When looking at the renters in this 25 to 34 segment, today they are paying (on average) 19% of their income while back in 2005/2006 they were paying 17%.
On these measures, Mr Matusik argues, Australian housing isn’t unaffordable at all. Importantly, first home buyers are now paying much less now for housing (ie owner occupation) than they were seven or so years ago.
As he also states “maybe housing, and in particular new housing, isn’t perceived to offer value for money. That is quite different from being unaffordable.
Maybe when it comes to first home buyers (and housing affordability in general) buyers have now become way too choosey.
What does this mean for you as a seller?? If you are considering selling your property you will need to be competitively priced and presented to “stand out” in the crowd and be seen as value for money. Buyers will quickly discount properties if they do not stack up to the research they have done online when they enter your home.
What does this mean for you as an investor ?? Do your research, ask your agent for their advice, and you may be in a position to pick up your “bargain.
Either way, your Professionals agent is well equipped to advise you on how to proceed so please give us a call to discuss your property needs.