- JPP Buyer Advocates - https://www.jpp.com.au -

Housing Affordability will only become more difficult.

The gloom and doom from the media would make you think that property prices going up is a bad thing. Nothing could be further from the truth. The majority of wealthy people around the world have a large proportion of their wealth held as property. The average person will generate more wealth out of their family home than almost any other investment.

The Reserve Bank is seriously considering raising interest rates again this month. They know there is enormous investment in the pipeline happening in Australia. And with that comes wages growth and inflation. With that comes both growth and stabilisation within our economy. With that comes wealth to the average Australian. WITH THAT COMES PROPERTY PRICE GROWTH.

I am asked daily: “are we at the bottom of the property cycle?” I can answer quite honestly; “I don’t know, but we are not far off”

When the $100 Billion “plus” of investment in the mining sector comes online, property prices will jump. Not everywhere, but in the areas that have historically been highly sought after. AND THIS IS NOT MINING TOWNS. IT IS NOT NEW ESTATES. It is within 20 – 30 km of the CBD of our major cities. Most probable highest growth areas will be Sydney, Melbourne and Perth. It usually takes a little longer to filter through to Queensland.

In January 2008 when the GFC hit, everyone was talking 40% drops in the median price to housing. Professor Keene ending up taking a very long walk over that lost bet! The median price of property in Melbourne at the end of the March Quarter was $472,250. It is now $565,000. This is an increase of 20% over three years. This is down on the long term averages. Normally our median would see approximately 8%p.a. There was a drop in 2008, it then stabilised and climbed through 2009 and the early part of 2010, before arresting at its current levels. The last 30 years have seen recessions, market fluctuations, stock market crashes and the GFC and we still have the top third of suburbs in Melbourne averaging growth rates between 9% & 11%p.a.

If we look at individual suburbs in relatively good locations such as Prahran units: increase 28% increase; Elwood units: 36%
Yarraville house: increase 15% increase Kew 25%; Frankston: 18%

It is not a case of will the market rise, it is a case of WHEN will the market rise. The time to buy property is “As soon as you can afford to do so”

Ian James
Director JPP Buyer Advocates