House prices through the roof
During the Covid-19 pandemic there has been much said about the shocking increase in property prices around the world.
Take Brisbane, Australia for instance- the median house price in September 21 has hit a record of $702,455 and Sydney house prices have equated to approximately 30.4% of annual growth – the highest on record reaching $1,499,126
Read more here
In New Zealand, the average national house price hit $937 000 (according to Core Logic -a property analytics data company) and the Real Estate Institute of NZ shows there has been a 15.4 % increase in house prices to Sept 2021 ($795 000 compared with $689 000 in Sept 2020)
Read more statistics here
Many buyers seeking to get into the property market are naturally distressed at the high prices. Properties that were advertised only a few years ago for $350 000 are now getting double that. Read more here
While some homeowners are rubbing their hands in delight with the increase in their home values, it certainly pays to be cautious, because if you sell your home for the profit, and decide to rent while you look around, you might be sadly worse off.
Prices rise and fall as per the supply and demand factors of the market.
Ultimately if you buy and sell in the same market, you gain on one but pay on the other so it evens out.
FOMO (The fear of missing out refers to the feeling or perception that others are having more fun, living better lives, or experiencing better things than you are)
While it would be wise to not buy in a hurry or with FOMO as a driving force, many of us are ignoring this due to lots more factors that drive the housing market.
Employment opportunities within countries that are suffering labour shortages due to rolling lockdowns and border closures also play a role in the housing market.
Low interest rates while they have helped many get into the property market, might yet prove to be a double edged sword when those interest rates start to rise.
The people who have over extended themselves are then forced to sell. Property prices then come down as homes flood the market.
Let’s hope that this does not happen, because logically, you would think the housing market cannot continue rising at the rate that it has during the pandemic.
“You cannot logic your way through emotion” and people need a roof over their heads, so it might get to be a really expensive roof in years to come!