Real Estate Market Trends
Perth in the early 2000s was a stark contrast to our previous home in India. For starters, Perth completely lacked the urban sprawl that a city like Mumbai offered. You couldn’t really mention urban living and Perth in the same sentence, given the entire central business district (CBD) spanned one single street!
While I have a notable bias towards real estate, it is factually incorrect to state that this asset class is immune to volatility and corrections. As real estate operates like other asset classes, it is important to understand the drivers for its cyclicality.
I’ve sold a handful of my own properties over the past few decades. All of these sales have been private sales, with the assistance of a realtor. There’s no specific reason as to why I chose the private sale route. I did of course have the option to sell my homes through another preferred avenue – auctions.
Australia has been in a precarious situation for the past few weeks. There have been rising infection rates across the Eastern States. The vaccine rollout has slowed dramatically. State-wide lockdowns are frequent and often extended. The housing market doesn’t seem to care.
If you’re planning to build a home in Perth, chances are it will take some time. It will certainly be longer than the average 6-8 months it traditionally takes to build a single-storey home. Now on its face, this should seem surprising to you. It certainly was to me when I heard media reports stating it may take up to 3 years to build a home.
The concept of investing seems very different to when I started. In fact, some parts are unrecognisable. Terms like cryptocurrency and non-fungible tokens (NFTs) frankly intimidate me. Also, I may be wrong, but it seems like these new investment areas are better suited to millennials and the younger generations.
Since the dawn of human civilisation, we have gathered in groups. Whether it was early settlers or modern day civilisation, it has all been an attempt to perfect cohabitation. While this was borne out of security and general well-being, this has somehow evolved into convenience and comfort.
For the first forty years of my life, I lived in apartments. A city like Mumbai doesn’t offer you much diversity in your living preferences. In fact, apartment living is the only available option for a city with an urban density of approximately 21,000 people per square kilometre.
The Australian housing market continues to exhibit strong signs of growth during the first few months of 2021. Capital cities are rebounding from the COVID-19 slump and there is also evidence of continued interest in regional markets. However, the question remains: how long will this positive streak last?
There is a widespread view that real estate is one of the most stable asset classes for which to grow your wealth. This is despite the cyclicality of the real estate market and the fact there have been numerous real estate market downturns in the last century. You don’t have to look too hard to find many doomsayers suggesting a new real estate market downturn in 2021. So why do many (including myself) continue to place faith in real estate?
As of October 2020, the Australian real estate market continued to battle through the impact of the COVID-19 pandemic. The real estate market, like other parts of the economy, was not impervious to the economic impacts stemming from the pandemic. However, the extent of the impact varied depending on where you live in the country.
In December 2019, I was quietly hopeful of what 2020 and the new decade may bring. From a real estate perspective, I had my fingers crossed for a change in fortune for the wider Perth property market, which has been in a depressed state since late 2014. I was given reasons to be optimistic for the New Year. For starters, I read an online publication, which forecasted that, over the 2019-2022 period, Perth was expected to record a median house price growth of 6%.