Housing in hot demand as supply remains low

Adam Smith 14 October 2016

house demandHousing demand has hit an all-time high according to a new report.

The REA Group Property Demand Index has shown housing demand growing to a record high, with demand for houses jumping 3.1% in September alone. Demand for apartments, meanwhile, rose 1.9% over the month. The group said people viewing houses on realestate.com.au outpace supply.

Unsurprisingly, New South Wales and Victoria are the country’s most in-demand property markets. Tasmania and the ACT are also experiencing strong demand, the report said.

Australia's fastest selling suburbs

“Despite talk of over-supply and poor demand conditions, this result supports continued price growth in what are considered to be increasingly unaffordable markets,” REA Group chief economist Nerida Conisbee said.

Conisbee said the high demand was driven primarily by a lack of supply, particularly in Sydney and Melbourne, and that a number of factors were keeping sellers away from the market.

“Fewer people are looking to upgrade – this may because they fear they will be unable to get back into the market, or conversely, many are not willing to spend any more on property,” Conisbee said.

“Long term, tax factors play a major role in why people are holding on to property longer. For older people, moving to less expensive accommodation is not necessarily an attractive option. The family home is not income-generating and investing for income attracts tax. Therefore, holding on to the family home remains the most tax-effective option for many prospective down-sizers.”

Latest home loans headlines

Image: Shutterstock

More great ideas from finder.com.au

Get a life insurance quote
Get a life insurance quote

Find out what it costs to protect yourself and your family

More info...
Refinancing home loans
Refinancing home loans

Choose from offers with rates as low as 3.39% p.a.

More info...
Google Pixel
Google Pixel

Compare plans for Google's flagship Android phone

More info...
Christmas ideas
Christmas ideas

Visit our Christmas homepage for gift ideas, markets, travel & deals

More info...

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Ask a question
feedback