The housing market has experienced a steady upward trajectory in prices since the beginning of the year. This growth can be attributed in large part to a significant shortage of properties available for sale. But with listings increasing again, does it mark the end of the market's strong growth phase? The housing market is far more complex to be driven by just a single factor alone and the outlook is not solely determined by a change in the number of properties available for sale. Both supply and demand of properties are being driven by a range of varying influences. A first consideration is the reason behind the surge in the number of properties available for sale. A distressed market where a significant number of homeowners are struggling to pay their mortgages or changes in policies may make owning property less desirable, would likely result in a decline in prices. Conversely, in a buoyant market where sellers believe they can get their desired price due to strong momentum, the opposite effect could occur. The current surge in property listings may be attributed to a blend of factors, some positive and some negative. On the downside, high interest rates have made owning properties less appealing and more challenging. On the upside, the momentum in the market has led to significant price hikes since the beginning of the year, prompting more sellers to enter the market. The demand for housing has become increasingly complex and has intensified over the past several months. In Australia, the population surged by 500,000 people in the previous year, necessitating the construction of an additional 200,000 homes. Regrettably, only 173,000 new homes were built, resulting in a significant deficit. As a result, the competition for available homes has risen significantly. Furthermore, the rental market has become increasingly competitive, with the pandemic driving up rental prices as people relocated, resulting in a shortage of available rental properties once migration resumed. As a result, many people found it more financially feasible or appealing to invest in the established housing market, further increasing the demand for homes. The challenges in construction have also led to an increased demand for established properties. With the rise in construction costs, it has become increasingly difficult to find builders, making it more expensive to build. Consequently, many prospective homeowners who would have otherwise opted for a new home have turned to the established property market. WILL RISING LISTINGS SLOW THE MARKET THIS SPRING?
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