The high number of empty blocks in Australia is a serious concern for many property investors. But should you be concerned as a property investor? Are numbers of empty blocks a bad sign for property investors? These are some of the questions we will answer in this post.
Australia’s property market has enjoyed rapid growth for quite some time now. Just a few years back, almost every city in Australia was recording ridiculous annual price growth – but in the past few years, the real estate market seems to have hit its tipping point. You can go ahead and conclude that the good days are over. In case you had any doubts about these, simply look at the price decline in Australia’s big cities. Whether its duplexes, dwelling units, renovations or private homes prices, it is evident that it’s not business as usual.
With a slowdown in Australia’s real estate market, construction has also been affected. If you were to take a stroll around many suburbs in Australia today, you’ll see empty blocks. One of the main reasons why this is so is the number of building approvals. In the past 14 months since January 2018, the number of building approvals has dropped by 6.79%. If you compare building approval numbers during the market’s peak in August and now, there is a 35.8% drop.
Should Property Investors Be Worried?
Do you need to worry about the number of empty blocks? Or should the small number of building approvals be of concern to you? The simple answer to this is yes. Why you ask? Well, there are so many negatives that empty blocks symbolise. This also goes for a reduced number of building approvals. One negatives property investors can take away from this is financing. To be exact, this shows that it’s very difficult for real estate investors to secure financing. Without financing, they won’t be able to do a lot of things to help with their development projects. This includes purchasing all the necessary building materials. Furthermore, they won’t have financing to hire personnel for the job.
If developers are facing challenges securing financing, regular Australians are also faced with the same issue. What this results to is purchasing power of Australians going down. You don’t have to do much to see how bad things are. Simply carry out an index of secondary sales of houses or lands. You can do this on sites like Gumtree. What you’ll see from your search is a decline in prices. Many property investors have done this because their units have failed to sell with their current price. To see if they can get a quick sale, they reduce the prices.
Should you as a property investor worry about the number of empty blocks? The answer to this question is yes. This, however, doesn’t mean you have no safe options. With the right advice and help, one can be able to survive these troubled times.
For expert advice on all things property investment from experienced property investors, do contact Duplex Invest. To speak to one of their representatives simply dial 1800 600 098. There is also an option of sending them an email. For this, you’ll need firstname.lastname@example.org.