Usually, the RBA is the one being positive about the housing market, but in recent times we’ve seen certain RBA big wigs actually ring warning bells advising caution towards the new units market in our biggest CBDs. This concern from our market watchdog has been building for some time, and here’s why I don’t just share their concerns, but why I think they may be underestimated.
Why has the Reserve Bank of Australia gone out of it’s way to whack specific categories of the housing market over the head?
Well, for those who have listened carefully, the Reserve Bank of Australia Governor Glenn Stevens has taken any opportunity over the past few years to warn Australians about the dangers of certain property types, specifically outlining unit oversupply as it’s main concern.
These not so subtle alarm bells have fallen on some deaf ears it seems, with many investors not heeding the warnings and allowing themselves to get caught up in the high rise unit marketing juggernaught.
The problem is, this isn’t the only issue facing property owners, with foreign investment and affordability issues also taking precedence. How to spot these warning signs before they become reality, as well as how to safely and reliably pickgrowth markets around the country as been the main focus of my free seminars recently. I’ve had many questions about how this may affect the local area, and I will continue to do so at my next round of events.
The RBA first started biting their nails regarding the Melbourne and Brisbane CBD units a couple of years ago, and as recently as this April where they announced “…ongoing risk comes from the significant and geographically concentrated growth in supply of new apartments in Sydney, Melbourne and Brisbane due for completion over the next few years.”
Again more recently, the shift was made to include Sydney in this group, with Governor Stevens indicating that “considerable supply of apartments” could have adverse effects, “particularly in the eastern capital cities.”
Historically the posture of the RBA has been presented to the public in such a way that it attempts to prop up the Australian housing market, and while low interest rates are still a sign that this is their intention, these kinds of comments specifically targeted at the high rise unit market are unusual.
And it’s because of this we all need to take heed.
As this is adding to the mounting warning signs we are seeing pointing investors away from the high rise unit markets in our biggest capital cities, which could very well have adverse effects on other parts of our markets.
Understanding the ever shifting sands that our property markets lay upon is crucial to only protecting you and your family, but putting them in the best position possible for the future.
For this reason we hold regular seminars to keep property owners and investors as informed as possible. Our final dates for 2016 are fast approaching, so please come along to one of these complimentary information evenings located near you. Seats are limited, so to reserve your spot, click here now.