Australia’s Next Property Boom is Approaching and Here’s Why

I know you’re probably thinking, “Leonie, didn’t we just have a property boom?” and the answer is yes, we did, and I think the next one isn’t too far away, and I’ll explain why in this blog.

If you read one of our most popular blogs on property cycles, you would know that history tends to repeat itself in real estate

Right now, the Australian residential property market as a whole ( There are still markets rising ) is experiencing a momentary dip in prices. This decline in values is on the back of a tremendous boom period for homeowners, primarily due to the Reserve Bank of Australia’s decision to raise interest rates.

Rising interest rates are currently being used to bring inflation back to normal parameters. That is expected to occur in the 1^st or 2^nd quarter of 2022.

Whilst many might think inflation is currently the government’s biggest concern, you’d be mistaken.

The Australian Rental Crisis That No one Saw Coming

Australia’s federal government is facing a monumental crisis never before seen on our shores regarding a lack of housing.

You’ve probably seen some of our recent reports and content surrounding the rental crisis currently occurring in Australia. The truth is that it is expected to get a lot worse, before it gets better.

Property rents have increased over 30% in some locations in the last twelve months, with all major capitals receiving at least 20% gains in weekly asking rental prices.

As pressure mounts for a solution to the astounding rise in weekly rents and a severe supply shortage, the government must address this issue quickly to save hundreds of thousands of people from becoming homeless.

The Australian rental crisis of 2023 will lead to our next property boom!

Are You Part of the Problem?

Approximately 7 million people in Australia live in the 3.3 million properties used for private rental purposes.

Interestingly, 91% of those 3.3 million properties are owned by private investors, just like you and me.

The problem is that as of August 2022, only 1% of the 3.3 million properties in the rental pool were advertised for rent. With a population of 7 million tenants, under 33,000 homes were for rent last month – staggering numbers.

The reason is that many investors are leaving the market, fearing rising interest rates and inflation or simply paying attention to the almost laughable commentary across mainstream media networks.

These are all momentary factors that influence markets for small amounts of time.

Every time a property investor sells their property, it’s another potential loss to the rental pool, meaning one less family without a place to call home.

As anyone following along for a while would know, property investing must be considered with a long-term strategy and view in mind.

Therefore, those investors who get too caught up in the current annoyances in the marketplace would do well to remember their long-term strategy and, for now, roll with the punches because the grass is much greener on the other side.

Where Are All These People Coming From?

The metaphorical dial on immigration levels has been turned up well and truly past 10.

Given the record low unemployment levels in Australia, the federal government has just increased the permanent overseas migration threshold to 195,000 people per year to assist in filling the 500,000 jobs currently advertised, but not filled.

On top of that, Australia is currently getting 10,000 new student visa applications every week, and we’ve just adjusted the time frame to six years.

All this equates to an additional requirement of 75,000 new homes required to house this influx in population.

The government recently pledged $575 million for affordable housing, a considerable number with the first impression of a potential solution, but that only equates to 6,000 homes.

The Solution That Will Lead to the Next Property Boom!

Eventually, the governments of Australia will be forced to entice Australian property investors to build more property to house the growing population. They’ll need to expedite the activity to respond adequately to the dire housing shortage.

Unless the government can miraculously discover and fund 200,000 new homes for the Australian population, Australia as we know it will be almost unrecognisable.

The government will not be able to fund the construction of the new homes themselves, so here’s what they’ll do.

• Lending policy and regulations will relax, making it significantly easier to gain access to credit.
• Interest rates will maintain or start to drop.
• The government will introduce incentives such as “stamp duty concessions or reforms” to expedite activity.
• Potential additional grants or incentives.

You can almost guarantee that property investors will flock back to the housing market with the above points introduced.

A colossal bull rush of activity pushes prices up, and “WALLA”!

You’ve got your next property boom!

Please don’t wait until the masses are in line for their chance to own an okay property.

Savvy investors should be acquiring the A-GRADE properties whilst competition is less fierce, enabling them to ride the next boom for longer and with much better results!

We are here to help. Reach out today to discuss ideas and strategies.