Population growth is an important driver of residential property, and unfortunately it is not being recognised as one of the major contributors to price growth in Sydney and Melbourne. When you look at the arguments around affordability, it is Melbourne and Sydney that are Australia's only real trouble spots. This correlates incredibly closely with the population dynamics being experienced in this country.
Read the Full ArticleInterest rates remain on hold at 1.50% by the RBA. What is somewhat ironic is that at the same time, there is a parliamentary inquiry into why the banks have not left interest rates on hold. RBA Governor Philip Lowe has stated that there has been an improvement to the global economy, though some uncertainties remain. He makes the case that America has passed the bottom of the interest rate cycle and that inflation has now started to rise in many advanced economies whilst the expectation of quantitative easing largely diminishes.
Read the Full ArticleIf Australia was balanced on its central axis, somewhere through the middle of the Northern Territory and South Australia, it would be leaning firmly to the east as the weight of population growth continues to be attracted to the Pacific Ocean.
Read the Full ArticleThe RBA cash rate remains unchanged at 1.5%...nothing to see here unfortunately. I suspect I am probably one of the few that are really looking for an interest rate rise rather than the talk about a cut. When interest rates are going up, our economy will have turned the corner, full time employment will have improved and people in theory should have more money in their back pockets.
Read the Full ArticleThe Reserve Bank of Australia has dropped the official cash rate by 0.25% to bring the official number in at 1.5%. There will be enough speculation around by many commentators suggesting that this will create a greater catalyst for property prices to escalate, but I’m not so sure...
Read the Full ArticleThe answer is really very simple, people. If the population is growing faster than supply, then the market moves into a position of under supply where prices for both purchasers and renters escalate. Conversely, when the supply exceeds the population growth, the market moves into a position of over supply and prices typically track sideways or fall, along with rents. In reality, the time at which a market stays in equilibrium is often inherently short by contrast.
So if people are driving the demand for housing, what does Australia look like? Whilst we are experiencing a period of unprecedented population growth nationally; it is far from being distributed evenly. It is these demographic dynamics that are really shaping the growth, or lack thereof in many of the states.
Read the Full Article
