The Australian Property Markets Are Rapidly Growing (And This is the Data That Proves It)
Now is the perfect time to invest in the Australian property market, despite what the economists tell you. These are the signs that the recovery and conditions for the next boom are underway.
In a previous article, we spoke about all of the doom and gloom related to the current state of the property market.
Browsing the news will result in you finding a lot of economists that will still claim that the market is on the wane. They argue that recent declines in the cash rate show an economy that’s in stagnation. They also point to recent property price decreases as a sign that a bubble’s about to burst.
In doing this, they create fear.
As a potential investor, you may believe that now is not the right time to enter the property market.
However, the truth of the matter is that now is the best time.
The market is already heading towards a recovery that will spark another period of growth. In a time where so many people fear the market, the savviest investors have the courage to take action.
You need to be one of them.
However, you need more information about what’s happening in the market before you make your move.
In this article, we present the data that shows that the economists don’t know what they’re talking about. These are the signs that the Australian property market has started to grow.
Sign #1 – October 2019 Saw Marked Price Increases
In November, CoreLogic released its property index results for October 2019. For those who are unfamiliar with the organisation, CoreLogic is one of the market’s most respected data providers. They constantly track market movements and provide plenty of data for investors.
You may remember the following chart from the article mentioned above:
What we see here is a pattern of growth that extends to almost every capital city in the country. In fact, Perth was the only city to record a decline in October. Every other city saw growth, with both Sydney and Melbourne standing out.
The quarterly figures are even more revealing. In Sydney, we’ve seen a 5% rise in property prices over the last quarter. Melbourne has seen a 5.5% increase.
These are not the figures that you would expect to see in a struggling property market. Instead, they’re figures that indicate a growing market that is ideal for investors.
These figures also fly in the face of what many economists tell you about the property market.
The declines we saw during the beginning of the year were simply a market correction. And that correction came as a result of external influences. Now that the market’s adapted, we’re seeing renewed growth that will extend into the coming years.
Sign #2 – Auction Clearance Rates Are on the Rise
Supply and demand have a large impact on Australian property prices. When buyer demand declines, property prices tend to follow. With fewer buyers to appeal to, vendors often have to lower their prices to achieve a sale.
Of course, the opposite usually holds true when buyer demand increases. With more competition in the market, vendors can feel more confident about raising their prices.
Many analysts look to auction clearance rates as an indicator of buyer demand. When the rates increase, this suggests that demand is on the rise. And when buyer demand is on the rise, the property market will grow.
The simple fact is that auction clearance rates are on the rise in 2019:
This chart demonstrates a consistent increase in clearance rates up to a high of 76.5% in October 2019 for Sydney. And it’s not the only city that’s seeing such marked increases in clearance rates.
The below shows the data for Melbourne:
Melbourne and Sydney are the two cities that have the most marked impact on the national property market. These charts show us that nearly four in every five properties that go on auction currently sell in these cities.
In other words, there’s a lot of demand from buyers. And that demand has grown so much that today’s clearance rates are reminiscent of those from 2016. That year saw record property price increases.
The current clearance rate figures suggest that further growth is almost inevitable.
Sign #3 – Asking Prices Are on the Rise
So, it’s clear that there’s a rising demand for properties in the current market. But why is that an indicator that you need to invest right now? After all, more demand means that you face stiffer competition when trying to buy a property.
The answer to that question is that vendors are already getting more confident. They’re responding to the rise in demand by increasing their asking prices:
This chart shows that asking prices rose almost across the board between September 2019 and October 2019. Even in Sydney, the slight decline essentially represents stability. Furthermore, the other data shared in this article suggests that Sydney-based vendors will soon be more confident too.
This increased confidence will affect your investment strategy. In the coming months, demand from buyers will continue to rise. That will lead to more vendors increasing their asking prices, which will make it even harder for you to buy.
Far from a market in crisis, what we actually see here is a market that’s shifting in favour of property owners.
The key here is that the shift is nowhere near complete. The market has just started its recovery phase and it will soon see another extended period of growth.
What You Need to Do Now
First, you need to stop listening to all of the naysayers. The property market underwent some turbulence during the early stages of 2019. However, this was not the bubble bursting, as so many economists claimed.
It was simply a short period of market cooling in response to various governmental measures.
Today, we’re seeing plenty of signs that the market is in recovery. Clearance rates and asking prices are both on the rise. The same goes for property prices in almost all of the major cities.
You need to act fast before your opportunity slips away. If you can buy now, you’ll benefit from the period of growth that these signs indicate is on the horizon.
Are you ready to get started?
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P.S. We are hosting the largest property tour in the country where myself and my business partner Lianna Pan are presenting live.