We’re all getting pretty used to paying more than we used to.
We’re all getting pretty used to paying more than we used to. Whether its for bread or milk, coffee (another essential item), computers or housing, pretty much everything you touch has a new price tag that makes the old full price look like a bargain.
As exxy as things are here though, spare a thought for the Americans this month, that not only are finding themselves just slightly more popular as a nation than Russia, but are also facing self-imposed tariffs of up to 104% on foreign made (virtually all) goods sold in the USA. Imagine prices literally doubling overnight! Procrastination can be expensive, but if you put off your car or tech purchase by a month, well that’s expensive and a half!
Thankfully, economic sanity prevails a bit better on our shores, and price rises remain more reliably linked to supply and logistics challenges. At least for the most part….
Housing is one area that has definitely been a supply problem, with the demand for property long exceeding the number available, virtually nationally. Tight supply, high demand – and tada – higher prices.
While prices have gone up across the board, there have definitely been segments that have seen stronger growth than others, with some surprises.
Houses have shown the most consistent growth, but apartments (which struggled to grow in our market for over a decade) have outperformed, both at the entry level and higher end.
The entry level has moved as the houses have moved up. The buyer with $400,000 can now rarely get into a detached house, so units have become the new starting default. At the upper end, downsizers now have more money exiting their houses, so can afford to spend more for a higher quality apartment. A $100,000 annual uplift in medium to high end apartments is not out of the question in the right locations.
Land has occupied an interesting ground. Prestige positions (beachfront and acreage in particular) have shot up significantly, as each sale leaves fewer options for those with the money to build their dream vision. More standard blocks (particularly sloping ones) however have lagged behind as the pace of growth in construction costs has moved ever faster. While buyers might have more money to spend (or the expectation at least), with the build component taking up a higher proportion of the total budget, land hasn’t had the same room to move. There are plenty of examples where first home buyers have seen land go up $60,000 but the build has jumped by $120,000 or more.