Housing is among the most valuable assets owned by most Australian households. It is a significant element of household wealth and provides a unique role as a valuable investment. With most people having secured small business loans and mortgages against residential homes in Australia, housing plays a significant role in balancing the financial sector. The property market in Australia is expected to see big changes in the 2020s. The costs of properties are likely to increase at a slower rate than they have in the preceding decades, primarily because the rate of interest cannot drop much further. The big cities in Australia will continue to grow as well as other big regional towns. Most people will like to live in medium-density housing and larger apartments. This article highlights three observations about property price trends in Australia in the 2020s.
The rate of interest will remain low.
Interest rates are expected to remain low in the 2020s. So, it is less likely that there will be property price modification caused by rapid change in the rate of interest. The reduction of interest rates was a global trend in recent years. Interest rates were reduced by high levels of debt and low rates of potential economic growth. These causes are likely to persist in the 2020s, indicating that the interest rates will remain low in the next few years. In the short-term, it is likely that the RBA will reduce the interest rate even further. If the rate of unemployment remains high, the RBA might execute alternative monetary policies to reduce borrowing rates even further. If that happens, property interest rates will be lower than 3% in the 2020s.
Robust population growth will persist but might be more spread out than in the previous decades.
Strong population growth will continue in the next decade, which will prop up the ongoing strong demand for housing in Australia. In the previous decade, the average population growth in Australia was 1.6%. The increased population growth was primarily because of higher immigration rates. The government predicts that strong population growth will persist within the next few years.
In the 2010s, population growth was strong in Melbourne and the neighboring areas, South-East Queensland, and Sydney. However, these trends are expected to change in the 2020s. More individuals might move to smaller cities and big regional towns instead of Melbourne and Sydney. The government is advocating for this to happen. It is creating new regional worker visas and is giving other incentives to migrants who settle anywhere else apart from Brisbane, Melbourne, and Sydney.
Smaller cities and regional towns will increasingly attract more migrants as they continue to grow. Policies targeted at inspiring regional migrations will be more successful if transport networks between major cities and regional towns continue to improve. Policies for encouraging migrants to settle in regional towns have mostly been unsuccessful. But the high property prices in Melbourne and Sydney might now mean migrants will be more willing to settle away from these cities.
More large apartments and medium-density housing will be constructed in the 2020s
More family-friendly houses are expected to be constructed in the 2020s. These large apartments will have 3 or 4 bedrooms and extra communal places such as playgrounds and gardens. When you consider the advantages and drawbacks between location, size, and price, most people say they would like to live in medium-density dwellings like an apartment, a terrace, or a townhouse in a suburb nearer to the city instead of an isolated home in a far suburb. But the supply of apartments and medium-density houses in Australia. The construction of these kinds of dwellings is expected to increase in the 2020s. The government is changing its planning regulations to enhance more construction.
In conclusion, if you would like to know the value of a property in Melbourne and the surrounding areas, visit www.valuationsvic.com.au to talk to an experienced property valuer who is familiar with your area. We provide our customers with independent property valuations, consultancy, and general advice in Melbourne and the neighboring regions. Contact us today to learn more about our services.