Market Insights by Kevin Young

Do We Have Falling Demand?

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First, let’s start with the nationwide economy.  Nothing has ever been rosier.  We are exporting like never before but with a sensible RBA Governor.  We have a low 0.72c Australian dollar.  This means that every time we export something for $72, we get back $100 US, as we export in US currency.

Not only are exporters flush with this money, but from taxes so are local, state and federal Governments.

A great time in the economy.  This money is finding it’s way into infrastructure and jobs, jobs, jobs.

Now let’s look at property and the simple laws of supply and demand.

 

We currently have falling supply!

  • Falling development applications

which means

  • Falling building approvals

meaning

  • Falling starts

and

  • Falling mortgage approvals

Do we have falling demand? NO! We have the population rising at 200,000 each and every year, year on year!

Because of the negative media and banks restrictions we have temporarily fewer buyers competing with us for a new property.  This will change in February. Why February?? Keep reading……

As always in property, there are times when the builders are in charge and price setters and there are times when the buyer is in charge and set the price.  Right now, it’s the BUYER who is in charge!

The future!

You watch.  By February with the Federal election so close and the Negative Gearing debate high on the policy agenda, the herd will wake up that NOW is the time to get in and buy a new property.  Almost immediately, the builders will be price setters watching the prices rise daily.  By the May election, there will be few new properties in good locations anywhere in Australia.  Most particularly in the areas we have chosen.  An area that is now its time in the cycle.  An area which has gone through its normal time in the cycle.  The slow cycle.

Next Thursday we are hosting a webinar on Negative Gearing and what the future looks like with its imminent changes. If you have not already done so please register now as this is one not to be missed!

Onwards and upwards!

Kevin Young

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