Reserve Bank adds to buyer urgency

However, a recent speech by Guy Debelle, Deputy Governor of the Reserve Bank of Australia, would give all those home buyers an extra sense of urgency.

Speaking at an investment conference run by the Society of certified Financial Analysts, Dr Debelle said that not only is a shortfall in housing supply “quite likely” in the foreseeable future, but that this would trigger a “larger price response” in property values. He also said that whilst demand for housing would continue to grow, construction of new housing to meet that demand was likely to bottom out in 2020.

If you’re interested in reading the whole speech, you can access it through the RBA website by CLICKING HERE. However, the quote that caught our eye was “While the increase in supply has finally met the earlier increase in demand, demand will continue to grow given population growth but supply is going to decline. So there is quite likely to be a shortfall again in the foreseeable future.”

Among the factors that the Reserve Bank has referred to in making this forecast were:

• The end of the recent upturn in housing construction numbers;
• The long lead times involved in constructing high-density housing; and
• The drop in property investment numbers due to tighter lending rules;

When you remember that Melbourne’s population is now growing faster than any other city in Australia, then the drop in housing construction can only lead to one result…more buyers competing for the limited number of available properties, and we all know what that will do to prices, right?

So, if you need any assistance or advice on securing your next home as soon as possible, don’t hesitate to have a chat with the team at Barry Plant Preston and Northcote. You can call us any time.