Immigrants Are Pushing House Prices Higher

By Peter Sarmas on 19 Mar 2018
No Comments yet, your thoughts are very welcome

 
Melbourne Auction Results 19th of March 2018

68%
Clearance
Rate

1273
Reported
Auctions

Sold at Auction: 739    
Passed in: 403  

 

Sold Before: 131    
Sold After: 0    
Private Sales 328  

 

 

Source:REIV

 

Melbourne Market Wrap 19th February, 2018

The REIV reported 1273 properties auctioned this weekend versus 370 last week and 1287 for the same time last year. The clearance rate was 68% which is steady compared to last week’s result of 69% and less than the 79% recorded last year for the same time.

Melbourne’s auction clearance rates continue to defy the experts and reinforcing that we won’t be seeing any property collapse, this on the back of very high volumes. No doubt more properties continue to pass in at auctions but they are being snapped up in post sale negotiations.

The weekend of the 24th is going to be another Super Saturday where over 1000 properties are expected to go under the hammer, we are expected to bid at two.

Although stock levels have been significantly high over the Feb and March period, auction clearance rates have not deteriorated. Quality properties are still seeing multiple bidders and vendors are meeting the market.

As the market pause for Easter I would expect any listings unsold to clear over the coming weeks.

We are already seeing vendor enquiries for May but i don’t expect stock levels and buying conditions to be at the level experienced these past few weeks at least until Spring later this year.

Thank you to Julie and Andrew who we bought and to Chris and Maria who we sold for over the weekend.

Prior to that thank you to our  four clients we bought and sold for the previous week, it has been very busy!

 

Thinking of buying or selling a home?

Visit our Street Advocate website or send an enquiry below or just call

Peter Sarmas on 0418 740 606

 

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Source: PIXABAY

Immigrants Are Pushing House Prices Higher

Coming from a migrant born family who played an integral part in rebuilding Australia in the 50’s and 60’s it is embarrassing and quite upsetting to hear the sort of rhetoric that immigration is the sole reason for house price rises.

There was even a huge debate on the ABC’s Q&A discussing how we have an immigration problem and the damage this is doing to our quality of life, what the?

Much of Australia’s history and success has been built on the back immigration, even as far back to the Chinese who came over to pan for gold and the Japanese to dive for sea pearls. Migrants have brought diversity, innovation, improved the quality of living and filled jobs which Australians could not do or were not willing to do. They still do this now!

The latest economic figures show Australia has benefited greatly from immigration. Much of the 2.4% GDP growth recorded last quarter was attributed to people coming from overseas. Add to this our booming tourism which sees close to 1 million Chinese tourists visit our country, many coming to Melbourne and Sydney and we begin to see why we are the envy of many nations.

Australia’s population is growing by 350,000 per year and since 2005 has averaged an increase of 200,000 people per year, up 100,000 on the previous decade.

The one big change these immigrants have brought into this country is where they live. Statistics show that 86% of immigrants in 2011 lived in major cities compared to 65% of Australian born population, this trend will continue.

Of course this means greater pressure on our major cities, so rents and house prices have risen. But this is not the only problem.  During the 1990’s Australia built 800 new homes for every 1000 people, today this number is half that, so we have a major supply problem that can’t be fixed overnight!

As Sydney and Melbourne undertake huge infrastructure projects demand for skilled labour in this sector will be driven up placing further pressure on the building industry. Just last week the Tasmanian government highlighted this with their housing problem. The Greater Hobart region needs 5000 new homes now, the problem is that there aren’t enough skilled tradespeople to build them.

Not only have we not built enough homes the last ten years but government have squandered the opportunity to plan for the future of our Australian cities. Money generated from the rezoning and development of land has not been used to build more train stations, schools, hospitals, infrastructure, public transport and freeway links.

I hear many people compare Melbourne and Sydney to New York and London, these cities we are not. London is 8.80 million people in size while New York is 8.50 million, while Melbourne is 4.8 mil and Sydney is 5 million. In case you were wondering the US has 325 million residents while the UK has 66 million, this against our 24.60 million.

Australia is a relatively new country with vast land which does not have the fiscal clout to undertake the major infrastructure projects it requires. My belief though is that our government must borrow to build and make wholesale changes to local planning laws to allow medium density developments near infrastructure.

People want to live in low rise apartment buildings or vial units/townhouses with some land component. Councils needs to stop being precious about their neighbourhoods and start rezoning land in the right areas.

When considering housing affordability we need to understand that global population has been growing steadily and house prices globally have been rising since the GFC. Housing affordability is a global issue which has been around for many years and won’t go away.

The recent agreement (in principle) of the Trans Pacific Pact between 11 Pacific nations (which includes Australia) already contributes 40% of the world’s economic output and will ensure our economy stays strong.

Australian exporters will benefit from new free trade agreements with Canada and Mexico, and greater market access to Japan, Chile, Singapore, Malaysia, Vietnam and Brunei. As tariffs are reduced and new partnerships formed the Australian economy will strengthen further bringing with it price growth and more immigration to our country, we need to act now and build a country with world class cities to benefit everyone not just the few. This will only come through planning and considerable spending.

 

If you are thinking of buying or selling email or call me for a FREE chat over the phone or in person.

 

A big Congratulations and Thank You to our vendors Danny and Frank who sold their mother’s property over the weekend in Fawkner.

 

Thinking of buying or selling a home?

Visit our Street Advocate website or send an enquiry below or just call

Peter Sarmas on 0418 740 606.

 

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About the Author

Peter Sarmas is a Certified Property Investment Advisor (PIAA) and Vendor/Buyer Advocate. Before becoming the founder of Street News, Peter completed a Degree in Applied Science (Chemistry) and a Graduate Diploma in Property Valuations (Hons). Peter believes property investing is a major and potentially risky undertaking. In his view, everyone should have an independent person acting on their behalf when seeking property investment advice.

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