I thought it was time to roll off some statistics that are as mind blowing as the Coronavirus numbers. Yes, they are about property and have to be heard to be believed.
Did you know that Sydney requires 41,000 new dwellings per year to accommodate growth? Over 2019 only 5,700 apartments were launched in new projects which represents a mere 20% of what occurred during the peak in 2015. Melbourne is even worse and now needs 50,000 new dwellings per year to keep up with its booming population. In 2019 a tiny 6300 were launched which is half of what the number was in 2018 and represents the fifth year of declining launches since 2014. Brisbane which is likely to be hit first with a major under supply requires 23,000 new dwellings per year but in 2019 only 2,100 apartments commenced representing less than 10% of the total dwellings required. In 2020, Brisbane is forecast to record the lowest level of completions since 2013.
Put simply our population and world we live in here in Australia is in the year 2020 but our construction, new builds and planning is a decade behind and falling even further away.
These astounding numbers bring me to some very very important comments -
Firstly, to the lenders, to the authorities, to the residents, we need to think of our grandkids, think way past the time when any of us will still be around. Nobody wants their grandchildren to be stuck in a time where housing is choked, grossly more expensive again than it is today and the grandkids either need to live in a 30sqm apartment in town or a house 90 kms out of the city with little to no infrastructure.
We need to free up lending, free up building guidelines, clear the planning red tape and educate all of us that the more we hold things up now the harder it will be for our grandkids. Put simply they will have nowhere to live. Sometimes it’s easy to think we are doing the right thing now by protecting the old but is that the best thing for the year 2050 and beyond and the best thing for our grandchildren when lots of us will be gone? Give the grandkids a chance, make it easier to build more houses.
Secondly for the property buyer, investor, retiree, everyone, this lack of stock in our major cities will be the #1 catalyst to prices continuing to rise. It’s impossible to argue with these numbers. As share markets crash, rebound, double, crash and hemorrhage just about every other day, property facts and figures continue to provide a clear strong message as to why pricing will just keep on rising in the long run. When there are way more people than there are houses existing and allowed to be built, prices must rise at a consistently very strong rate. There is no other way but up.
Lastly, we now throw in the last twist the twist that no one saw coming which is the Coronavirus. Some may think property will struggle due to the virus but by adding yet another reason why completed dwellings will slow, the Coronavirus simply limits the next wave of properties to purchase and of course increases demand for wannabe buyers before and after we reach a resolution to the virus. Don’t let the news fool you, supply of properties for sale is falling and falling fast. I hate thinking about the people saying in 12 months’ time – ‘I just should have when I had the chance’.
Whilst we all work through these times, don’t let a great chance pass you buy please. Think of ‘how to’ instead of ‘let’s wait and see’ and think of all the reasons why you can and not why not. It may be harder for some to think ‘how to’ at the moment because the news is telling us all to be scared, but those who actually ‘how to’ and work it out will reap massive rewards. For these people I take my hat off to you and stand and applaud your strength. Great success will be sitting in a box with a ribbon on it just around the corner. Go get em!