27 Sep Dwelling approvals good for home buyers
Despite high auction clearance rates, new data reveals that dwelling approvals are on the increase. Analysts say that the growth in the number of apartments and units being built is negative because it could lead to an oversupply, it’s actually a good thing for first home buyers who are looking to get a foot on the property ladder.
Now experts are worried that an oversupply will lead to a decline in property prices and a glut in the market. Of course, nobody would argue that this will see some developers and construction firms suffer, however it will allow more people to get a foot on the ladder which will ease pressure on the rental market.
Anyone who has tried to rent a property in a capital city would tell you that the market is insane and that it’s near impossible to get an apartment or house for less than $350 per week however prices for a two bedroom unit can go up to $950.
If on the average wage of $83,000 then that is marginally affordable, but let’s be honest, statistics can sometimes lie and that isn’t actually reflective of what people actually earn, which means they would be in rental stress – rental stress is of course defined as paying a price that is over 30% of your net income.
An increase in property developments will ease some of that pressure on the Melbourne property market and give people more choice of where to live. More choice not only has financial benefits, it also has benefits on the potential for overcrowding. Various newspapers across Australia, particularly in Melbourne and Sydney have run stories about slumlords. These slumlords have no qualms about allowing up to 8 people, sometimes even more to life in confined spaces which not only is a health hazard, it is also a safety hazard, especially if there was an emergency and the tenants needed to quickly evacuate.