There is no doubt about it, our housing market is undergoing a subtle shift that has been building momentum over the last few years. On the surface, we have seen the median price of Sydney and Melbourne increasing by $130,000 and $100,000 respectively during the period of July 2016 and March 2017, according to Domain data. Clearly there is much more to the story, if we dig a little deeper.
The census was our opportunity to do this, taking a snapshot of Australians and how they live on August 2016. However, this may not be exactly what we wanted given that we are now four years into one of Australia’s biggest East Coast property boom in recent memory. The housing market is now moving so rapidly, the data simply cannot keep up, leaving many key areas misunderstood.
For example, the census marked a number of “newly completed dwellings not yet occupied, dwellings which are vacant because they are due for demolition or repair, and dwellings to let” as defined by the Australian Bureau of Statistics. From this we cannot determine what this exactly means for our property market with the definition being so broad.
As mentioned by this article on Domain, The University of Sydney’s Peter Phibbs had brought attention to the changing family size of 2.7 to 2.8 people per household which is likely a result of increasing family size or as Dr Phibbs mentioned, could be a result of the increasing affordability pressures which are pushing young people to stay at home longer or share rental dwellings with a greater number of people to cover the cost.
We simply don’t as the data can be slightly ambiguous and in order to have firm understanding of what is happening, we will need to make comparisons based on past and future census which won’t be until 2021.
Another element to the shifting property market is that of investing strategies. The national survey failed to identify exactly who is living in these rental properties and whether or not they are property owners themselves. With increasing prevalence of rentvesting identified through research by Mortgage Choice, it has been revealed that upwards of 27.6% of property investors are purchasing investment properties before choosing to be owner occupied.
While rentvesting is a popular strategy, the lack of official data on the subject makes it difficult to determine the trends in relation to our current property market. The Investor Survey completed by Mortgage Choice and outlined in this article on Finder.com, has revealed that trend towards this strategy has experienced a slight downturn falling from 37.1% in 2015 to 36.1% in 2015. This has been identified by Mortgage Choice executive John Flavell as a likely result to changes by lenders to reduce curtail property investment.
The long-term trend however, has shown this strategy is growing in popularity. This is particularly evident as it becomes less financially viable to own your own home, although without the appropriate data from the census, we would need to rely on samples which may not reveal the full extent of our property market and the rapid fluctuations we experience during one of our greatest property booms in living memory.