Housing in hot demand as supply remains low
Housing 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.
“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.”