Flight to affordability will take over the flight to space as many home buyers seek more affordable units and townhouses rather than overly expensive houses.
Domenic Nesci, co-founder at Wealthi, a property investment company in Sydney, said the impending opening of Australia’s borders to international tourists and migrants will shift the demand for more affordable housing in 2022.
“The price difference between houses and units has never been so wide. And now we are seeing signs that people are shifting their focus on buying units and townhouses,” he said based on some data from Corelogic.
At the same time, Nesci said house prices have gone up so much over the past year, but wages haven’t risen as much.
“This means people will tend to buy what is affordable to get an entry into the property market. Otherwise, they won’t be able to catch up as prices continue to rise,” he said.
At the moment, there are mixed signals coming from the Reserve Bank of Australia (about when interest rates will rise), the banks – some of which have increased their lending rates and the government about border reopening.
But despite the mixed signals, Nesci believes there are opportunities for home buyers and property investors to buy into growth pockets.
“Sydney and Melbourne will always attract the tourists as well as the migrants. I see the demand for units/apartments and townhouses rising as we see the return of tourists, students and other migrants.”
He added there are also signs that interstate migration is slowing down or reversing now that internal borders are also reopening.
Based on Wealthi’s data, Nesci said “Rents are starting to grow and those who have invested in rental properties the past two years will see significant increase in rental income in the coming years.”
Published by Domenic Nesci, co-founder at Wealthi