In response to Tuesday’s increase by the RBA of the cash rate, Crown Group’s Chairman and Group CEO Iwan Sunito urges buyers to purchase now to avoid double digit price rises due to increasing construction and material costs and labour shortages.
“You have to expect apartment prices to rise progressively over the next few years while supply and labour shortages persist. We can expect double digit percentage increases in the cost of new build apartments each year for the foreseeable future,” Mr Sunito said.
“Those who are considering buying an apartment should act now by purchasing from a trusted developer with a track-record of producing quality apartments on time and on budget. By acting nowt, hey lock in today’s price allowing time for them to continue to save for their future purchase.”
Potential buyers have been expecting a rate rise for some time and have anticipated this by having additional savings, partially because of the pandemic and a self-imposed reduction of their discretionary spending. It’s estimated that Australian households saved somewhere in the vicinity of $140 billion during the pandemic.
“The limited housing supply and increase in the number of buyers means many buyers have been priced out of the housing market and apartments are a more affordable option. Mr Sunito believes this scenario is only going to be exacerbated in the next two years.
“Available stock of off the plan and newly completed apartments is diminishing by the day which is a sign that both owner-occupier and investors are very active at the moment.
Investors are returning to the market because rentals are rising which allows them to offset increasing interest rates against rising rental prices.”