FOMO (fear of missing out) seems to be a common theme around Australia’s property markets.
Auction clearance rates remain high, prices are continuing to rise and supply remains constrained.
And we are being played with by the media, who are whipping up a frenzy with emotive headlines, causing some homebuyers to worry that the housing market is running away from them, while they worry others by speculating that interest rates are about to rise or that unemployment will escalate to 8% when JobKeeper ends.
The fact that we respond to these headlines is normal.
After all, we’re human and the desire or aspiration of buying our first home or upgrading our existing home, or getting onto the property investment ladder is normal.
So to bring some sense into the discussion please watch this week’s Property Insiders chat with Dr. Andrew Wilson, chief economist of MyHousingMarket.com.au we dispel some of these media myths.
Australia’s housing market is in the midst of a broad-based boom
Home values have been rising in March continuing their strong performance in the first 2 months of the year and our auction markets, which are a good real-time indication of both buyer and seller sentiment have commenced Autumn with ongoing record-breaking activity.
Watch this week’s video as Dr. Wilson gives his summary of the auction markets around Australia.
The Sydney auction market is now tracking at unprecedented levels which is likely to continue moving due to strong buyer demand at a time when new listing growth declines.
One weekend after another the high auction clearance rates continue in Melbourne, meaning property prices can only go one way over the next year.
Rental market
While our housing markets have been very resilient through Covid and are now surging in 2021 our rental markets have been quite fragmented.
Watch this week’s video as Dr. Wilson explains how the disparity in rental markets across Australia has been extreme.
At one end of the spectrum, we have extremely tight rental conditions in cities such as Perth and Darwin where both house and unit annual rental growth is above 10%.
At the other end are the unit rental markets of Sydney and Melbourne where rents have plunged over the last year, down -5.3% in Sydney, and -8.0% lower in Melbourne.
In a similar vein to housing values, rental markets are stronger within the detached housing sector relative to the unit sector.
What happened to the recession?
Last week the latest economic data showed that our economy continues to rebound with the fourth-quarter GDP beating most expectations rising by a strong 3.1% over the quarter
Watch this week’s video as Dr. Wilson explains how our economic growth is being driven by broad activity with not only consumers spending but also businesses investing in machinery and equipment and government demand growing.
Unemployment
Recently the NAB/SEEK employment report suggested that strong growth in job ads signals the possibility that the labour market may tighten faster than expecting meaning unemployment will fall faster than many anticipate.
Watch this week’s video as Dr. Wilson and I discuss what’s ahead for our unemployment rate.
Interest rates
Watch this week’s video as Dr. Wilson explains my interest rates are not going up any time in the foreseeable future and how those who believe they will be putting the cart before the horse.
He also answers a regular viewer’s question about sovereign bond yields.
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Michael Yardney is CEO of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia’s leading experts in wealth creation through property and writes the Property Update blog.
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