As always this is just my opinion but I feel the need to voice it.

As you all would know, the housing market has been very poor over the last few years with house prices falling due to too much stock for sale and not enough demand. The post Global Financial Crisis (GFC) belt tightening from the lenders out there has also been a serious handcuff to the market place.

In recent times, with house prices dropping, First Home Buyers have started re-entering the house buying market which has coincided with numerous investors selling their investment properties.

This is certainly stimulating the market but it is also reducing the amount of rental properties available as those that were rentals are becoming homes to these First Home Buyers.

The snowball keeps rolling meaning that due to there being less rental properties available, the demand is increasing and this drives up the cost of rent.

This then makes more people look at buying, and so the cycle continues.

Obviously this is just part of the vast ebb and flow of the property cycle which may normally go up and down progressively over a 7-10 year cycle. All I’m trying to highlight is that this seems to be the turning point for house prices to start heading back upwards again. I could be wrong but as more people look to buy houses with lower prices and lower interest rates, you would think that it has to have a positive effect on the housing market as far as prices go. It should also, in the coming years, reduce the burden on the rental market, in theory anyway.

The main issue is that houses cannot be built quickly enough to satisfy either the buyers or those who are needing rental accommodation. The lending market is still getting its confidence back also so there is no quick fix. If you ask any investment guru (of which I’m not one) they always say to sell at the top and buy at the bottom of a property cycle, now would seem to be that time if you believe the theory.

I just wanted to highlight where I think the market is and where it could be going.

Well it’s my opinion anyway. 🙂