Along with the continuous boom of Australia’s real estate industry, the latest report from Real Estate Institute of Australia (REIA) suggests that the average capital city median for both houses and other dwellings has increased by 6.8% and 2.7% respectively–the recorded highest rate in a decade.

REIA President, Adrian Kelly, mentioned that with all the eight capital cities increasing (except Canberra), the weighted average median house price rose to $873,911. Among these, consistently, the highest increase in median house price is in Sydney with $1,309,195–49.8% higher than the national average. Currently, a typical Sydney house costs $117,000 pricier than it was at the end of the February. On the other hand, Perth gained the lowest median house price with $500,000, which is 42.8% lower than the national average.

“The weighted average median price for other dwellings for the eight capital cities increased to $621,313–a quarterly increase of 2.7%,” said Kelly. Sydney, Melbourne, Perth, Hobart, and Darwin experienced an increase in their median price for other dwellings, while Brisbane and Canberra remained steady, and Adelaide underwent a decrease.

Similarly, the median rent for 3-bedroom houses generally increased by $452.50 per week over the capital cities during the March quarter where Darwin had the highest annual growth of 7.3%, which now has the second highest rent of $538.50–next to Canberra’s $570 per week.

The same goes with the median rent for 2-bedroom other dwellings where the data “increased in Brisbane, Adelaide, Perth, Canberra, Hobart, and Darwin, but decreased in Sydney and Melbourne.”

Experts say that the housing prices across Australia accelerated to their highest levels in May through the combination of ultra-low interest rates, strong consumer confidence, and low supply.

Despite this, the market is continuously pushing forward which AMP Capital Chief Economist, Shane Oliver, explained. According to her, among valuable factors that contribute to this include “low interest rates, economic recovery despite COVID-19, government incentives for housing, and an overall fear of missing out (FOMO).”

Even though the market seems to be surprisingly strong, Matthew Hassan, Westpac Senior Economist, believes that it could not continue at such a fast pace, especially that affordability is one of the major concerns of home buyers who might no longer afford to get into the market.

In fact, from a survey conducted by the Australian Property Institute (API) and tech firm, The Search People, to almost 600 property valuers across Australia, 43% agreed that property is now essentially out of reach for the “average” Australian.

“The likelihood of owning a home is becoming increasingly low as residential property becomes unaffordable for the average Australian,” the firms stated.

John McGregor, a Sales Agent of 4one4 Property Co., strongly agrees that a property price is one of the major considerations of buyers or investors when looking for a property.

“Real estate just like any other estate class, the prices rise up then they rise down depending upon what’s happening in anyone’s investment cycle,” stressed John.

With such fluctuation in property prices, John left some pieces of advice for all the buyers and investors out there to help in their decision-making process:

Recall Opportunity-Cost

“If you’re looking for a house that you love, and you find that you’re in a competition with other buyers, and you’re required to pay a little bit more of what you’re required to, well unfortunately, that’s just the cost of the opportunity to secure that property today.” As he explained, if you want to grab the opportunity of securing a property that you want, you must be willing to give or sacrifice what it takes to get it–in this case, money. Remember that that opportunity is only available today and might not be available in the next 6 to 12 months.

Play the ‘Numbers Game’ right

Do not let your emotions overwhelm your decision process. All the numbers that are involved including the price of the property must be matched with your investment plan. “You’re allowed to be flexible, but you don’t want to become so emotional that you pay more than your plan would allow”.

Prioritise yourself

As a buyer, John said that you wouldn’t want to overextend yourself to the extent that you can’t have a ‘life’. You must decide based on your ability. Don’t put yourself in a situation where you commit to something that brings you so much financial stress or you might not be able to provide for your children growing up.

Know your everyday situation

You’re the one who knows what you or your family needs. Your personal life situations speak so much of what goals you can set for yourself. “If you need a bigger house because your family is growing, well, the best time to buy a family house is when you need to buy a family home,” John explained.

Those are just some of John’s words of wisdom for all the people who wish to secure a property whether for residential or commercial use. What about real estate agents, you might ask… Well, John got a little advice for you, too! (*wink)

“Our job never changes; our job is to ensure that we are able to match a buyer and a seller. Different markets require different strategies and different conversations. It’s our job to be dynamic.”

According to the findings of Westpac Housing Pulse, across Australia, house prices will rise by 15% by the end of 2021 before slowing to just 5% in 2022.

You might be wondering then, “when is the best time to buy and sell your property?”

Here’s John’s response:

“Genuinely speaking, it’s when you have to buy and it’s when you have to sell your property.”