Australia remains confident about real estate

Residential property market is proving resilient  

Australia’s property market is continuing to prove its resilience, and consumer confidence is increasing as a result. Real estate agents nationally are seeing a higher number of investors return to the market in addition to ongoing first home buyer activity, something welcomed by the industry, and by local agent Joseph Tan of CENTURY 21 Joseph Tan Real Estate. 

“Australia’s real estate market is proving resilient to tough times, which I like to think isn’t surprising really when you consider how hardy we Aussies are generally!” Joseph says. “We’ve been seeing positive movement in the market for a few months now and this has just been evidenced by the recent Westpac-Melbourne Institute index of consumer confidence increasing by a near-record 12.7% in June to 100.1 points.” 

With 100 points as a middle ground on this index, the recent figure shows that there are slightly more optimists than pessimists out there for the first time since last year. The increasing consumer confidence combines with a relatively soft landing as far as property markets in the current economic conditions go to produce improving conditions generally, something Joseph Tan is seeing investors in particular begin to take advantage of.  

“Many investors who have been holding off on property purchases are beginning to take advantage of the strong yields currently available, and the proven lack of volatility evident in the residential property sector,” Joseph comments. “Investors are starting to compete with first home buyers in the lower priced segments of the market where the yields tend to be higher and the risks lower. The continuation of this trend is likely to see investors entering the market at a more rapid pace towards the end of this year.”   

The resilience of the market and increasing consumer confidence can largely be attributed to Australia’s significant undersupply of housing, combined with a record population growth that is forecast to remain strong long term, and the strength of the nation’s banks.  

“Unlike other countries to which our property market is often compared, our residential property market has also been protected by Australia’s very strong banking system,” Joseph Tan explains. “Although it may be easy to criticise the financial sector when you’re living here, our ‘big four’ banks all have an AAA rating, and that’s no mean feat when only 13 banks around the world are currently rated AAA. In regards to the property market, we’re actually in a very good position here.”