BY GEETHA KRISHNAN
Expensive: While prices in Brisbane, Queensland and Perth, Western Australia have eased, Melbourne and Sydney are seeing astronomically high house prices. – filepic
SECURING a job and having a roof over one’s head for the long-term are the main aims of most migrants.
These goals are generally realised within a few years.
In comparison, the dream of owning their own home still remains beyond the reach of many Australians.
Land is not scarce in Australia, given the massive size of the continent, but there is tough competition for square metres of it, particularly in certain states.
Astronomical prices of houses continue to tell of a tale dictated by market forces.
It is a case of basic economics where the real estate market is fervently buoyed by an ever-increasing demand for landed properties.
As the supply factor struggles to cope, the impact is felt most by first home buyers.
Young Australian couples interviewed by the mainstream media fret that it might take decades to save for a reasonable down payment for their first house.
Many have no other option than to rent or consider high-rise living, even with dual incomes.
There is a definite shift in thinking, where generations before lived on large blocks of land.
They invested time and effort tending to gardens where flower beds and fruit trees flourished or where vegetables were cultivated for the dinner table.
It is understandably tough when sellers now are happy to sign on the dotted line in favour of cash-rich buyers who do not need housing loans unlike the average Australian.
Be it for investment or dwelling, a large proportion of these buyers hail from China, Hong Kong and Singapore.
According to recent figures released by the Real Estate Institute of Australia, median house prices have risen to almost AU$660,000 (RM2.11mil).
The median price for other dwellings rose to AU$517,929 (RM1.66mil).
Among capital cities, Darwin in the Northern Territory recorded the highest increase in house prices for the first quarter of the year but the market there is currently easing.
In New South Wales, Sydney’s median house price is edging closer to the AU$1mil (RM3.2mil) mark.
It is still a seller’s market in Melbourne while prices in Adelaide have risen by 0.1%.
However, prices in Brisbane, Queensland and Perth, Western Australia have eased.
Real Estate Institute of Australia (REIA) president Neville Sanders said in a recent report that the median house price was expected to continue surging over the rest of 2015.
In contrast, other housing market experts predict the property bubble is about to burst.
Compare this with the Reserve Bank of Australia’s (RBA) recent act of slashing lending rates to a record low and you will understand why people are still investing in homes.
One popular suburb with buyers in Southeast Melbourne is the highly sought-after Glen Waverley area and it boasts a thriving Asian population.
Since 2010, the average prices of mid-range houses in Glen Waverley have steadily surpassed the AU$1mil (RM3.2mil) mark.
Real estate agents operating here were often spotted going house-to-house to ask if homeowners were willing to sell and give them an indication of the price.
The price bait is hard to resist if you bought your property for a pittance and are looking to turn into an instant millionaire.
Prices on realestate.com.au and newspaper pullouts are often listed between 20% and 30% below the price agreed beforehand between the vendor and agent.
Though allowed, agents rationalise this by saying it provides room to negotiate.
However, it is a tactic that catches buyers off-guard.
With rising interest in the property, buyers are often tempted to approach banks for higher loans and risk getting into bigger debts.
With markets in Glen Waverley, Vermont South and Wheelers Hill saturated, buyers started expanding and looking at, for example, Wantirna South.
Updated homes on large blocks of land averaging 800sq m were still going for AU$750,000 (RM2.4mil) to AU$780,000 (RM2.5mil) towards the end of 2014.
By June, prices had climbed up to AU$1.2mil (RM3.84mil).
Auctions continue to be held weekly and attract large crowds in suburbs of interest where the proximity to public transport, schools and shops are main draws.
Chances to secure a property are better through private sales between the vendor and purchaser through an agent.
Sub-dividing is a familiar term where builders and property investors eye a large block of land with the intention of building four townhouses or two houses to maximise profits.
Older homes are given a fresh façade and updated inside with new flooring, bathroom, kitchen and wardrobes.
No one can predict where housing in Australia is headed but the trend for smaller homes with low maintenance gardens and close proximity to neighbours seems to be the way to go.
Geetha is a former StarMetro journalist now based in Melbourne and has lived in Adelaide.
