What are the trends in house prices in Sydney, Australia in recent years?

What are the factors affecting the future market of Sydney real estate?

In fact, there are two fundamental reasons why Sydney’s house prices are generally on the rise:

First, supply and demand issues. A shortage of supply will lead to rising house prices

1. Sydney’s increasing population of new students, immigrants, and international students is expected to increase by 1.6 million people in the next 20 years, requiring 664,000 new homes;

2. Due to strict land approval and layer-by-layer construction controls, it is possible to For a series of reasons including the idea of ??sustainable development, the overall speed of housing construction in Sydney can only be within the prescribed range from approval to completion, and therefore has not been able to keep up with the rate of population growth.

2. Inflation

As the amount of currency issuance continues to increase, prices continue to rise, and houses are completed by workers using tools to consume energy and building materials, so as wages, As tools, building materials, and energy increase, housing prices will naturally increase.

In short, real estate is the best tool to protect against inflation.

Australian House Price Report 2016

At present, the population growth rate of several major capital cities in Australia has exceeded the supply rate of housing. Until 2031, the residential property market in the Brisbane Local Government Area will require approximately 5,430 new dwellings each year.

Due to the large rigid demand, and judging from the current situation, wages are still rising and interest rates are very low, there is no reason why Australian housing prices should not rise. On the other hand, there is the trend of Chinese people investing in Australia. In addition to the signing of the China-Australia Free Trade Agreement (FTA) at the end of 2015, events such as Australia joining the China-led Asian Infrastructure Investment Bank tend to have a positive impact on the Australian real estate market. In addition, the inclusion of RMB in SDR also shows that overseas investment will be more convenient in the future, and the rational allocation of global assets is the best choice to follow the trend of the times.

So, will house prices continue to rise in the future?

According to the "Australian Financial Review" report, Louis Christopher, an expert from the SQM Research Center (who accurately predicted house price growth in 2012 and 2016), in his latest report Boom & Bust Report China predicts that if interest rates drop another 0.25 percentage points by the middle of next year, Sydney house prices will rise by 18% and Melbourne by 17%. Even if the central bank does not cut interest rates, if the Australian economy remains stable, Sydney house prices will still rise by 16 and Melbourne by 15.

In the future, Sydney's population will grow at an alarming rate, including the births of overseas immigrants and local residents. First of all, Australia has a large number of new immigrants every year. In 2014-2015 alone, Australia will add 190,000 new immigrants. The number of immigrants will continue to increase every year in the future, and the growth rate will become faster and faster. In addition, with national needs and government encouragement, the birth rate of Australian residents is generally maintained at 2 or even higher, which is much higher than the world average and almost three times the birth rate of China. The population is growing rapidly. Therefore, the limited land left, the rapidly growing population and the limited construction speed will make Sydney's housing shortage situation unable to be improved in the long term.

In general, under the dual effects of tight supply and demand contradictions and monetary policy, Sydney’s housing prices will follow the historical pattern: Sydney’s housing prices increased by 16-18% in 2017!