I watched the insight show on sbs the other night and they were talking about the poor housing ability in australia. They were saying that investors were a major contributor to the rise in median house prices. They were also talking about ways the government could improve housing affordability. An example was to release more land which would increase supply and therefore lower house prices.What impact would this have on the investor if more land is released. Would this mean that house prices would typicaly decrease and we would not see the growth of property prices.
I'm not sure which state you're in but it's all supply and demand. If govt supplies too much or too little it makes an impact. In Perth I know there is quite a few plans to make more affordable land/housing in the outskirts. If your concerned about values invest as close to the city as possible where land is in short supply. One of the upsides is less desirable peoople will move from inner city areas to outer suburbs. Linda
i live in melbourne. I havent invested in melbourne thuogh because its too expensive. My investments are interstate and i dont wanna invest in properties over 150K since im just starting out
More land releases only has a short term impact on investors and it is only minor.
A land release usually doesn't have much impact on lowering prices; this is governed by interest rates, inflation, supply and demand, and sadly, how much the price of ciggies, petrol and a sixpack, have gone up in recent times, or how much the punters blew on xmas pressies on the credit card.
The government really doesn't have any way to control prices, other than to change the rules for investors in relation to tax incentives and/or cap gains tax rules such as what happened in NSW a couple of years ago, or when they rolled back the neg gearing rules back in the '80's. These changes scared investors away by the thousands, forced up rents as there was no I.P's to rent, and ultimately there was another boom not long after. The new cap gains rule in NSW had a contributing effect in the big slump in that State in recent years.
What tends to happen is there is a small rush of renters to buy the cheaper new estate properties on the edge of town. Some may even move to those areas as renters still and there are always a few investors to buy these properties as well hoping for some cap growth, but they try to buy low, so are not an influence on the prices.
But in the end, people who rent will tend to live near work and transport to their work, people are always looking to move up to better houses and better areas as their income grows, people always want to be near the good things such as cafes, beaches, malls, good schools etc, so there will be areas that never go down in value no matter what the state of the market.
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