Property prices across Australia are soaring to record highs. In Sydney, the average price of a home in the Harbour City is now $1.1 million with units coming in at $800,000. That’s about $117,000 more expensive than they were in February. Similarly, in Melbourne, almost one third of homes are now selling for $1 million compared to only around 10% a decade ago. While high prices, along with faster average selling times, are great news for sellers, some buyers may struggle to enter the property ladder at all.
Increasing property values
“Professional valuers believe Australia’s residential real estate prices will continue to rise despite serious affordability and sustainability concerns,” the survey also found. While most property valuers surveyed expect a property marketing boom, they also believe the country’s entering a property bubble. “A combination of record low interest rates and buyers’ uncertainty of investing in other alternatives is fuelling high demand. This coupled with low supply is driving a ‘fear of missing out’ for many buyers”, explains Rafe Berding of the Search People. “As a result, in some cases, properties are being snapped up significantly above the asking price within moments of being listed”. While a bubble may be forming, it doesn’t seem set to burst at least in the short term.
The future of buying and selling homes
Australia’s real estate market is also changing in other ways thanks to the advent of new technology. For example, digital lenders are now operating exclusively online as an alternative to traditional lenders that rely on legacy banking infrastructure. Digital lenders offer home loan financing delivered through intuitive digital platforms like apps. The quick, streamlined application process and better rates are fast making digital lenders popular with buyers. Additionally, virtual viewings are increasingly commonplace with some realtors even offering interactive tours. With VR headsets and hand controllers, buyers can direct themselves through a property before deciding to commit to an in-person viewing.