Did rents also go up? I'd expect investment demand to cause a dislocation between rent and price. If it's a supply issue then both will go up.
Edit: But seriously, it's available housing that matters. We can have a shortage of available housing with an oversupply if investment demand is high enough. That is what the Irish experience demonstrates. Only second homes and investment properties can be underutilised...
This is why I believe that any government serious about tackling an accommodation crisis should start by determining what proportion of homes are being used as a primary residence.
As an aside, I'm quite shocked by what has happened to the property market in Australia since (particularly Sydney). It stands in stark contrast to NZ. I'm pretty confident that it won't continue this way for too much longer. A recent new report suggested the majority of recent sales in Sydney were to cash buyers. How long can that last? The higher rates will eventually have an effect.
> new report suggested the majority of recent sales in Sydney were to cash buyers. How long can that last?
A long long while. Every existing owner, 60% of the population, is at the top of the pyramid scheme. Anecdotally from agents and my observation is the ones selling an existing proprry are cashing out, doing a price insensitive downsize, and/or buying a “first home” for family members. More pressure on the middle market.
Similarly our net new residences and net inward migration is still insane. Something like 40k residences and 500k new people. Interest at a historical norm of 7% isnt going to do anything in light of that. Especially with good odds on RBA decrease this year or next.
Extends to the rental market as well. Minus the inner city covid pause rents are also tracking 10% or higher gains year after year.
So yes tax insanity, finance, and “investment” memes have cooked us. But I dont see anything getting materially better in light of that supply and demand.
If there are any examples of times/places where rents have fallen in nominal or real terms, they will almost all coincide with this kind of demand drop.
Supply-related rent drops are theoretical and almost never happen in real life. Supply is important anyway, because otherwise rent growth accelerates faster, but the market will almost never supply housing to the point where rent change is negative.
People who advocate for tenements usually do so to eliminate the price floor.
My rent in my single family home has only ever gone up when we had a large property tax increase in the area. I actually looked the increase up for our place and the landlord ate most of the cost. They have NOT raised rent outside of that. They are super responsive to repairs and stuff as well.
Broadly, I'm sure rent prices are on the rise, but there are many reasons for that, with rent comparison/adjustment software being a big part of that.
I have alluded to this on social media platforms, but really, the only permanent solution to stopping explosive price increases on renting or buying. We did this for health insurance and it really did a lot (more than most people realize), if property sales and rent were limited to say, inflation, or even inflation + 5% I suspect things would change quickly.