Buying : Market Trends

MARKET TRENDS

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> Emotion
> Demographic
> Social factors
> The Australian and Global Economy
> Political Climate
> Physical
> John Paul Getty III

The market is driven by supply and demand and can only go three ways:

1. Up
2. Down
3. Sideways

The following are factors that can affect the market.

SUPPLY AND DEMAND FACTORS

The emotional force and effect on residential property has a major effect on a number of recurring factors that influence price.

• Media reports are positive and interest rates are low, consumer confidence is high and the "talk of the town" is about property.
• Some "fears" creep in. "If I don’t buy now I’ll miss out". "The prices are going up rapidly and so forth".
• Sellers are split between "cashing in now" and "achieving a good price" or holding back and waiting for further price rises.
• The emotional factor can strongly influence the "law of supply and demand".

The "Baby boomers" market represents nearly 4 million people (about 20% of our population).

• Many younger people are deferring decisions to have children or not intend to have any at all.
• The singles market is a substantial market and also has strong spending power.
• Investors and first home buyers compete for the same market.
• Tenants are attracted to purchasing property particularly in times of low interest rates.

Construction of a new road system (the Western link or Scoresby bypass).

• The immigration policy has created trends requiring specific cultural and religious needs.

These also have an impact on the real estate markets.

• Commodity prices have an effect in rural and agricultural centres.
• US Economy
• Recent changing political and financial nature of some Asian countries.

Federal, statewide and even local government has an effect.

• Federal elections.
• Introduction and/or continuance of the first home buyers scheme.
• Changes on capital gains tax.
• Statewide planning schemes.
• Planning and zoning legislation changes.
• New style shopping centres.
• New transport/freeway links.
• Local redevelopment.

These are the most recognisable for example

• Location.
• Style of property.
• Streetscape.
• Growth potential.
• Quality of fittings.
• Size of land.
• Usage of land.

"When the economy is bad and property values are falling, and everyone wants to be a seller, buy well-located real estate and hold on to it. Don't sell whatever the critics, the cynics and losers might say. That way you will end up very wealthy". - John Paul Getty III

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