However, there are some big differences between the latest price upswing and previous booms in Australian bricks and mortar.
A glaring distinction is the market is overwhelmingly being driven by owner-occupier homebuyers, rather than investors, who turbo-charged the property surge of the past decade.
CoreLogic’s Tim Lawless says at the peak in 2015, property investors made up about 46 per cent of all new mortgage lending. Today, investors account for just 23 per cent.
The surge is also a response to rock-bottom mortgage interest rates; when combined with a low supply of homes for sale, the result is strong price growth.
There is also a self-fulfilling dynamic at play in which people tend to jump into the market when they see prices going up, thereby drawing in more buyers. The phenomenon, known as “fear of missing out,” or FOMO, could further exacerbate price growth.
A Local Example
A good example of how a new infrastructure project can impact on a location.
The University of the Sunshine Coast Moreton Bay campus opened in February 2020 and created high demand on housing within the region.
Suburbs such as Petrie, Lawnton and Kallangur being the closest to the campus have seen strong price increases. An increasing demand for rental accommodation for university students has pushed up rents and added to property price rises. .
The campus is only the beginning stage in a planned 10.5-hectare university precinct that will form the heart of The Mill at Moreton Bay. It is expected by 2030 that the USC Moreton Bay campus will be equal in size to its flagship campus on the Sunshine Coast.
So an increase in demand buy renters and also investors has contributed to the strong property price rises here. That is likely to continue as the full benefits of the University growth continue over the next few years.
So a successful bid for the Olympic games will mean that Brisbane will see a decade or more of large infrastructure projects and enjoy the benefits of increased employment, increased money in the local community, and increased demand for property.
Let the good time roll on.