In news released today, Brisbane house prices increased by 1.5% in February!
House prices in most regional areas of Australia including Devonport on the North West Coast of Tasmania (where I live) are surging. Commercial property prices in many areas are doing the same and the house building industry is at capacity (or maybe slightly above).
All of this in our biggest recession since the great depression. All of this with our tourism market decimated due to no overseas arrivals. All of this with no net migration which until recently contributed 57% of our population growth.
Why is this happening and will it continue?
Low interest rates and recent government stimulus seem to be the key drivers, but if our population doesn’t increase then at some point supply will surely exceed demand and when this happens prices must fall. Of course there will be different supply and demand pressures in different geographic areas.