The property market in Australia has certainly experienced some ups and downs throughout the last few years, with more changes coming.
To get a sense of what some of these changes will most likely be, the following is some insight into the evolving conditions in the nation’s property market in 2021 and beyond.
Rising prices in the capitals
If the current growth trends continue as they are now, and property prices grow at the same annual rate as they have over the past three decades, prices in the capital cities will likely go up a lot in the not too distant future. Brisbane and Melbourne will both experience sizeable increases in overall property values, and while the prices in Sydney are already considered as costing a lot, today’s prices will be considered a bargain compared to the prices of future generations.
Most economic modelling has revealed that home buyers could be paying upwards of $7 million on average by the end of 2030, which will be double what they are paying now. One of the key factors that will be likely to keep pushing these prices upwards is the same thing affecting prices in the past and that is the ever-decreasing supply of buildable land in capital cities.
Climate change will be a factor
There’s been a variety of climate-related disasters as far as housing goes over recent years, such as the unprecedented bush fires that tore through much of Australia earlier this year. So, it’s no surprise that our warming planet has already started impacting the housing market for some people, and it will likely be on the radars of an increasing number of both buyers and sellers in the future.
Many people in the industry believe that these climate issues will only become worse in the decade ahead, with both buyers and sellers taking the consequences of the changing climate into account.
Climate change will almost definitely make homeownership more expensive in the medium term, as it will begin driving up insurance rates in affected areas. This is already being seen as homeowners affected by fires and flooding or other rising water have already started seeing the costs for insurance skyrocket.
This trend is likely to continue over the next decade, as it potentially starts pricing people out of areas that have already been affected, or who insurers believe maybe soon. While specifics of some insurance policies are still to be determined, it’s pretty clear that the effects of climate change over the next decade will begin driving up the cost of homeownership.
Green construction and sustainability
Most new buildings sites are already featuring aspects of green building and sustainable construction, which refers to building with resource-efficient and environmentally responsible methods.
We can expect to see the use of green walls and rooftop gardens increase in both commercial and residential buildings that they will eventually become a pretty common feature, especially as more people recognise the overall benefits of increased energy efficiency.
We’ve recently seen a range of other new ideas in the construction industry, such as thermally driven air conditioning, carbon brushing building facades, and even bricks that have been manufactured using recycled cigarette butts.
The use of prefabrication where components of structures are assembled in factories is also set to dramatically increase, as it is both cost and energy-efficient. Green building as a whole is highly likely to become one of the major construction industry trends in the next decade, not only with an increase in green construction methods but also reusing waste materials.
As the affordability gap for buyers continues to stretch on average, these inequalities could expand even further in the wake of the coronavirus pandemic. While no one has a crystal ball to see into the future, what is clear is that the next decade is going to be defined by some massive changes.