THE realestate boom currently being witnessed in the region is a welcomed sign of a strong economy.
Reports from throughout the region that houses are being sold ‘sight unseen’ demonstrates the strong attraction to the region from people far afield.
Anecdotally some people have purchased properties as a ‘safe haven’ during the Covid-19 pandemic – away from the metropolitan regions – while others have simply noticed the great value for money local properties represent.
The reality is that housing in our region has been under-priced for many years.
Prior to the current up-swing, housing prices remained flat or with slight rises over the medium to long term.
New developments across the region are selling like hotcakes.
One person said: ‘Put a fence around any piece of grass and it will sell.”
Outside of Mount Gambier, towns in the region are also experiencing the same demand and some face the problem of a the lack of new developments.
While it’s good news that demand is high and house prices are rising for homeowners, affordability may be an issue for others.
Bank interest rates are extremely low at the moment – the question is how long can they stay at the current historic low.
It wasn’t that long ago that interest rates around eight per cent were regarded as normal and expected by investors.
Of course, anyone who took out a home loan in the late 1980’s would have thought a 10 per cent interest rate from the bank was cheap as this was coming off the back of interest rates hitting double that during that decade’s recession.
So, what does the future look like for those buying their first home at historically low interest rates?
Investors, like self-funded retires, like high capital growth and high interest rates – first home buyers fear it.