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Rick Otton Reveals Why Australian Real Estate Crash Was Avoided(April 22, 2014)
(PRWEB) April 22, 2014
The Australian housing market has experienced what observers have described as a house price overvaluation despite the environment of recession in recent years. Property investment educator, Rick Otton believes there are a number of reasons the Australian real estate market has avoided a crash.
Australia was ranked as having the third most unaffordable housing on the Demographia International Housing Affordability Survey for 2013 third on a list of only seven developed nations.
Mr Otton, known internationally for his strategic approach to property investment, says there are real reasons why Australia did not suffer the big slump felt in other markets.
You have to look at all of the factors at play in a boom/bust cycle, explains Mr Otton. There were a number of reasons why we have been able to avoid a crash, and have continued to sustain what are seen to be, for many, unaffordable housing.
The first factor on Mr Ottons list is Australias rapidly growing population. As the population continues to experience steady growth it is only natural that the housing market will begin to see a housing shortage, says Mr Otton. This comes back to the growth of overseas migration that we have seen since 2004.
Like just about any other industry, real estate is susceptible to the rules of supply and demand. So as the population increases, the demand for housing grows, often outstripping the number of houses on the market which drives prices higher, says Mr Otton.
Shift In Household Size
Although the Australian population is growing, the average household size is shrinking, and this, Mr Otton believes, has created a shift in the housing needs of the population.
We have seen the average household size continue to shrink over the past decade and we are currently at an 11 year low, he said.
Between 2012-2013 there was an average reduction on household size of 1.6 percent compared to the previous year. This is in part due to Generation Y, but also Baby Boomers downsizing from their massive four and five bedroom homes to more manageable dwellings such as a one or two bedroom apartment or single floor dwelling.
This shift continues to stimulate the market, providing buyers in the down-sizer markets, and sellers for those wanting to upsize.
Mr Otton also looks for impact from the banks. Record low cash rates from the RBA as well as foreign nationals continuing to receive permission to scoop up Australian properties have stimulated prices, says Mr Otton.
Very low mortgage rates are fuelled by generous first-time home buyer incentives from the government. In 2008 the government doubled the first-time homebuyers grant from $7,000 to $14,000 for homes being resold and $21,000 for new construction. In 2009 the grants were returned to their original level.
Despite being ranked third on the least affordable housing ratings, housing affordability has started to improve especially in areas such as Brisbane, Melbourne and even Sydney.
Buying real estate in Australia is still achievable for everyone, however, believes Mr Otton. He is known internationally for his innovative strategies to property investing without the need for huge deposits and bank loans.
To give an insight into his strategies, he is currently offering a complimentary downloadable Power Property Profits Pack at CreativeRealEstate.com.au/freepack and access to his (also no-charge) podcast series at CreativeRealEstate.com.au.
Phone Enquiries, in Australia, are welcome on 1300 888 450.
For over 20 years property millionaire Rick Otton has built an impressive real estate portfolio using innovative strategies that he has developed strategies in which transactions are made without the need for traditional bank-type loans. He constantly refines his techniques as he buys and sells properties through his We Buy Houses business which operates in Australia, New Zealand and the UK.
A gifted speaker and educator, Mr Otton conducts regular one-day free seminars across Australia, which build on the the concepts he shares in his 2012 book How To Buy A House For A Dollar, voted by Money Magazine and Dymocks Book stores as one of the Top 10 Most Popular Finance Titles for 2013.
He regularly records and publishes iTunes podcasts via his channel Creative Real Estate.
His innovative low-risk, high-reward approach to Australian real estate investing has been featured in a variety of television programs and magazines, including Today Tonight, A Current Affair and Australian Property Investor.
To register for one of Mr Ottons free Australian one day seminars visit ReadySetBoom.com.au or phone, in Australia, 1300 888 450.
Read the full story at http://www.prweb.com/releases/rick-otton-analysis/australian-real-estate/prweb11783016.htm.