With low interest rates to remain a reality for some time, contributing to the relative stability of economic influences affecting real estate, the pressure is on Governments at all levels to identify new ways to increase supply and tackle the affordability issue, according to the Real Estate Institute of NSW (REINSW).
It begins with better understanding the problem, says REINSW CEO Tim McKibbin.
“Property consumers today are far more sophisticated than they were 25 years ago. People have different priorities and preferences, not just when it comes to their home but also their lifestyle, which means both Governments and the market must offer greater flexibility through a broader range of solutions,” Mr McKibbin says.
“Supply is the key to tackling the affordability issue but to meet contemporary needs, this supply must be realised in diverse ways, to offer choice when it comes to housing typology, access to transport and amenity, price points, lifestyle factors and more.
“A continuation of the low interest rate environment for the medium term will contribute to the relative overall stability in the economic influences which affect the state’s real estate market.
“This stability on the demand side provides an opportunity for innovation on the supply side, which is where affordability can effectively be addressed,” Mr McKibbin says.
Mr McKibbin expects the market to remain strong through the second half of the year.
“Some commentators have suggested a market correction is coming but we believe the likelihood of this is low,” Mr McKibbin says.
“Price growth may be easing, as the market has largely absorbed the stimulus from low interest rates and the lack of supply, but mild increases remain on the agenda.
“With the economic fundamentals remaining stable, we expect the market to remain strong. A continuation of the Reserve Bank’s stated course for the cash rate is an important element in this stability.
“Of course, for those looking to enter the market, housing affordability remains a real issue. It’s time to get creative on the supply side to meet the needs of today’s discerning property consumers.”
Similar to this:
REINSW: Landlords and tenants need support too
REINSW: Budget bounces back because of property
REINSW - Sydney’s vacancy rate shows positivity for areas hit hardest by pandemic