Property values strong…For now
I have reproduced part of an article that I received today. It is important to note that we have an influx of migration into Victoria of around 1700 people per week.
We are not producing new properties to cope with this demand and I was informed by a home building company that we were around 8000 properties behind demand.
This shortage will continue for quite a while, because not enough land is being re-zoned to keep up with the demand. And the reason for this is the government does not want to spend on the infrastructure required for the outward growth of Melbourne. The government wants more in-fill development by increasing the density of the residential areas of Melbourne. Of course, this development cost is borne by the developers, saving the government money.
So I cannot see how real estate prices will stop rising as long as demand continues as the population increases.
Melbourne and Sydney continue to perform strongly, with last weekend’s auction clearance results tipping 70 per cent in both cities.
Melbourne continues to position itself as a force to be reckoned with, recording a clearance rate of 80.9 per cent and a median house sale value of $415,000.
Similarly, Sydney also performed well last weekend with a clearance rate of 73.1 per cent.
Statistics from RP Data show the median house price in NSW is now $555,000 and is widely expected to climb higher while ever demand is increasing.
Earlier today the Reserve Bank warned that house prices would keep rising until housing construction accelerated to meet the swelling population.
Delays on planning approvals and a shortage of skilled tradesmen – a problem likely to worsen as the mining boom looks set to return – are contributing to rising costs in the sector.
Source: REAL ESTATE BUSINESS DAILY
Cheers
Bertram
BERTRAM DANIEL FREI CEA(REIV)
LICENSED ESTATE AGENT & AUCTIONEER
It’s a Breeze – Real Estate Solutions
M 0418 313 299 Bus 03 9848 6224
Posted via email from itsabreezerealestatesolutions’s posterous
