Each major Australian city operates under its own market conditions and growth cycles. Since the new year, Australia has seen a rare trend with all six major Australian cities showing positive signs. Buyers across each major city are becoming increasingly active, and this is a positive sign of things to come. With an uptick in buyer enquiry, usually comes activity – which can be a leading indicator of capital growth. Notably, property experts in Perth are seeing an increase in enquiry and buyer activity which is a great sign for the local market, and an indicator that this market is heading towards more positive conditions in 2020.
In the last few years, changes to planning policies, market uncertainty and most notably the difficulty in securing development and construction loans have led to the significant decline in new housing projects across Australian cities. These changes have directly contributed to reduced supply of housing. Already this impact has been felt, with Melbourne, the Gold Coast, Brisbane, Adelaide and Perth all registering undersupply vacancy rates (under 3%). 2020 is set to see this trend continue, as supply continues to remain low, the vacancy rates are anticipated to tighten further. This build-up of pressure will continue to translate to rising rents and subsequently rising yields.
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