Several of Australia’s leading real estate and financial experts have challenged the ‘doom and gloom’ outlook at a major panel event, saying the country’s property market remains resilient.
The event, held at Salt Village, saw financial commentator Michael Pascoe, demographer Bernard Salt, independent property analyst Michael Matusik and Tweed Economic Development Corporation CEO Tom Senti reveal emerging property trends, with a focus on the surging Tweed Coast region.
Both Mr Matusik and Mr Pascoe said a major concern was that misinformation about property and commodity values were dampening consumer confidence.
Mr Matusik said despite common belief, prices were not actually falling, and rising unemployment rates would not necessarily have a negative impact on values.
“It’s true that there has been a fall in median sale prices in recent months, but resale prices, which are a much better indicator of the strength of a market, have actually risen – particularly across the Gold and Tweed Coasts,” Mr Matusik said.
“In reality, the reported ‘fall’ in average property prices is a reflection of the fact the lower end of the property market is becoming more active and in the Gold Coast-Tweed region demand is strong for homes priced up to $750,000,” he said.
“Increasing unemployment rates are often cited as a major factor influencing waning property sales and values, but history has shown high unemployment rates don’t necessarily spell bad news for real estate.
“To the contrary, in previous turbulent periods such as 1992, 1997 and 2001, during which unemployment rose by an average of 2.3 per cent, housing prices rose by about 18 per cent over the same time frame.
“Today, many investors are looking back at the boom in 2003 and saying that was the ideal time to buy. The truth is, property market fundamentals are just as strong, if not better, today than they were six years ago.”
Mr Pascoe said some analysts had made extreme predictions about downward trends in property values.
“That well-publicised horror forecast that Australian home prices will fall by 40 per cent certainly grabs headlines, but it is demonstrably incorrect,” Mr Pascoe said.
“The counter-intuitive fact is that average Australian house prices – and I stress ‘average’ – actually increased during the last recession.
“There’s every indication the ‘average’ home will again prove remarkably resilient in this recession.
“What’s also being overlooked in the tales of woe about our economy is that the commodity boom is not dead. Last year’s ridiculously inflated bubble prices have burst, but our commodity exports are still doing better than they did in 2007.
“You wouldn’t want to be facing the global recession in any other country.”
Panelists argued the tight supply of property in many areas across the nation would put a floor under prices and ensure solid demand as consumer confidence increases.
“The Australian market is comparatively secure,” Mr Matusik said.
“The economic reality is that our country’s new housing market is likely to continue to be undersupplied for the next decade or so.
“The Gold Coast-Tweed region in particular has very tight supply. The Gold Coast needs an additional 137,500 new dwellings by 2031, but our research shows this target will not be met unless more Greenfield land is released for development.”
Mr Senti said he expected the Tweed would lure many south-east Queenslanders across the border, as the region offered a less expensive lifestyle whilst still boasting strong demand and low vacancy rates.
“Projections suggest by 2031, 38 per cent of Australia’s population increase will occur in the East Coast Growth Corridor, stretching from Coffs Harbour to Hervey Bay. The Tweed is the epicentre of this region,” Mr Senti said.
“There was underlying demand for 550 new homes to be built in the Tweed region last year, and this number is likely to continue to increase.
“Despite this region’s rapid growth and solid demand, the NSW government’s new Far North Coast Regional Strategy means only 19,100 new dwellings can be built in the Tweed Shire between now and 2031.”
Mr Senti said opportunity for job creation and economic growth on the Tweed were major draw cards for businesses and private investors.
“We are looking to create 25,000 new jobs in the region over the next 22 years,” Mr Senti said.
“To this end, TEDC initiatives have already resulted in some $650 million in completed or planned developments to date.
“The key to future-proofing the Tweed economy will include the development of masterplanned estates and business parks.
“We have already committed to the creation of a $350 million industry centre in Murwillumbah which will generate up to 2,000 jobs when occupied.”
Mr Salt said coastal regions would continue to prove popular with Australians for decades to come, for both lifestyle and economic reasons.
“The fundamentals that have driven the seachange shift over the past seven years have not changed, with beachside areas supported by good infrastructure and amenities, like the Tweed Coast, expected to lead the way over the next decade,” Mr Salt said.
“The baby boomer generation is on the cusp of retirement, and the latest demographic research suggests the majority of these people will move to settle in beachside locations between now and 2021.
“A seachange is also appealing to young families seeking an affordable lifestyle – in the Great Depression many people fled capital cities in search of new work opportunities and lower cost living. The same may happen, in a less dramatic way, due to the current turbulent economic climate.
“Whilst living by the beach is appealing in itself, the destinations that attract most people are those supported by good infrastructure, employment opportunities and tight supply in the housing market.
“The Tweed Coast demonstrates all of these qualities and, in particular, the opening of the Tugun Bypass road project will continue to build business and private investment opportunities between the Tweed and its neighbouring regions.”