5 Fun Facts About Australia's Real Estate Industry
5 Fun Facts About Australia’s Real Estate Industry You Might Not Know
The thriving residential property market in Australia has supported homeowners with great returns on their real estate investment over the years. With housing prices growing steadily despite turbulent economic conditions, supported by government incentives as well as falling interest rates in 2013-2014 to 2016-2017, those who’ve purchased homes in Canberra have enjoyed growing their personal net worth. Thanks to a slower housing transfer rate as well as a weak growth price over the past two years, unfortunately many interstate investors have counterbalanced much of the growth over the first half of the five-year period.
Government limits on property investment by foreigners also contributed to expected revenue declines in 2017-18 and 2018-19. The commercial property market has performed modestly over the past five years due to volatile business confidence at the start of the period.
But enough with the statistics! Here are some of the fun facts about Australia’s real estate industry you may not know.
Real Estate is Big Business in Australia
Australia has one of the world’s most highly urbanized populations with the majority living in metropolitan cities on the coast. Blessed with exotic locations, our Australia’s real estate industry is on the rise with local, tourists and foreigners seeking to get a taste of all that Australia offers. In addition, it’s worthy to note that residential real estate accounts for more than half of all household wealth.
Most Australians are Homeowners
A research conducted in Australia in 2011 found that more than 65% of households either own their homes or are purchasing it through a mortgage scheme while the remaining households are renting. Irrespective of claims circulating around about unaffordability, the proportion of home ownership has been stable for more than fifty years, after rising from 53% in 1947 to 63% in 1954 and hitting 70% in 1961.
The Level of Home Ownership Australia Increases With Age
The level of home ownership in most developed nations, especially in Australia, increases with age. This is evident today, as:
- The younger generation under the age of 24 years prefers to rent while the very privileged few are either owning or buying homes.
- When climbing to the more mature demographic of people aged between 25 and 35 years, it’s pretty much 50-50 between owners and renters and
- By the age of 75, close to 85 percent of people own their home outright, less than 3 percent have a mortgage and less than 10 percent are renting.
Homes are Becoming Very Expensive in Australia Today
On average, prices of homes over the last 10 years in Australia have been on the increase. The price of housing, like the price of any good or service in a free market, is driven by supply and demand. When demand increases and/or supply decreases, prices go up. Therefore, if there is a sudden or prolonged increase in demand, prices are sure to rise.
Houses are Fast Becoming Less Affordable in the Big Capital Cities
The affordability of housing facilities in highly populated cities such as Sydney and Melbourne remain a pertinent problem for policymakers. Those trying to enter the property market in Australia’s largest capitals often find it difficult. It’s a perfect market situation. The reality of the matter is that homeownership in these cities is fast becoming unaffordable. Much of this is due to an increased wealth, growing job opportunities and living standards of the people living in these cities combined with a vast undersupply of dwelling types such as suburban homes to which families would much rather occupy.
In conclusion, the real estate industry in Australia has its own highs and lows but that does not change the fact that fact living or acquiring a home in Australia is not easy. There’s still no doubt that those who manage to buy into the industry are rewarded with growing asset values. Blessed with welcoming people, job opportunities aplenty, fantastic weather, good food, exotic locations and to top it all off, excellent security measures, Australia remains one of the best countries for real estate investment.
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