‘Too big to fail’: Why the Aussie property market won’t go down

PHOTO: So long as Australia’s popuation is growing so too will the property market (Source: Getty)

Australia’s property market has been booming, and while there has been some slowdown in the pace of growth, a drop in prices is not likely, this expert said.

Director of Metropole Michael Yardney told Yahoo Finance that the events of the last year have proven that the Aussie property market will not falter.

“The Australian property market is too big to fail. What we learnt from COVID-19 last year is that the Government and the banks are not prepared to let the property market fail,” Yardney said.

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The Australian property market is worth around $9 trillion – bigger than the GDP, ASX and superannuation industries combined.

Property demand soars

The most recent Corelogic research found that even without international migration due to closed borders, demand for housing has reached a 12 year high.

Corelogic executive research director, Tim Lawless said there were around 598,000 house and unit sales across Australia from January to August this year.

That is the second largest number of annual sales since 2004 and a 42 per cent lift on the annual sales compared to the last 12 months.

“Such a significant surge in housing demand may seem surprising at a time when overseas migration has stalled, however the substantial rise in home sales can be explained by a lift in domestic demand from previously low levels,” Lawless said.

“Housing turnover trended lower from late 2015 as credit conditions tightened, housing affordability became more challenging and transaction costs such as stamp duty became increasingly expensive as prices rose.”

However, Lawless said that since credit policies have loosened and mortgage rates have reduced to record lows, more Aussies have been encouraged to participate in the housing market.