The property market has turned negative, how low can it go and for how long? Some experts think we are close to the bottom, others think we have further to fall.
But, even in a worst-case scenario, is this a disaster?
Most doom-mongers take a short-term approach and only talk about what will happen in the immediate months and years. What they miss out is that the fundamentals of Australian society – a young country whose households will increasingly need housing.
Australia’s has one of the western World’s youngest populations, with a median age of 38.8 years compared to 46.9 years for Japan and 47.1 years for Germany. This relatively young population will underpin housing demand for years to come; these young Australians tend to start families soon after buying property – producing more generations of home buyers.
Since 1945, over 7.5 million people have settled in Australia with our overseas-born resident population estimated to be 28.2 per cent of the population. For many of these, the Irish, Greeks and Italians, owning property has been a paramount goal upon settlement – underpinning the property market.
We now have around 200,000 immigrants a year, many of them coming from countries such as India and China where owning property is also paramount.
Recent research shows that 33 per cent of all housing lot sales in greater Melbourne have been to buyers born in India, compared with 25.8 per cent of Australian-born buyers.
Official government data shows the number of permanent Indian migrants to Australia has surged from just a few thousand a year two decades ago to as high as 40,000. India passed China as Australia’s biggest migrant market in 2012.
The property market may not be in for the best 2019 but, with wave-after-wave of immigration, a short-term dip will be outgrown by longer-term demand.