9 . INFRASTRUCTURE IMPROVEMENTS
Significant infrastructure spending can completely change house values in the areas that they benefit . The announcement of the Western Sydney airport and the subsequent investment that has taken place since then has led to marked changes to housing demand in the surrounding area . Similarly , continued investment in transport links between Geelong and Melbourne have led to pricing in Geelong more closely resembling Melbourne pricing .
10 . GOVERNMENT POLICY
Government policy can change house prices . Easing up of planning controls can lower the cost of housing while policies that put more money in people ’ s hands can increase them . The main change to government policy this year will be the introduction of the shared equity scheme , allowing low income earners to buy a home in partnership with the government . It ’ s expected that this will lead to higher prices , particularly at lower price points .
11 . CONSTRUCTION COSTS
It ’ s getting more expensive to build a home . This will push some people into established housing ( if building becomes too expensive for them ) and will lead to a shortage of housing ( projects will be put on hold ). Fewer new homes and more people wanting existing homes will mean that prices won ’ t fall as much as they otherwise would .
12 . PERFORMANCE OF OTHER INVESTMENT TYPES
Most people that purchased property during the pandemic have done particularly well in terms of capital growth . Although this is now slowing , strong rental growth is now occurring and many investors will benefit from this . An investor sell off of property assumes either a focus on reducing debt or a wish to invest in something else . While property price growth is slowing , so too is the rate of growth of other asset classes . In some cases , prices are falling rapidly ( e . g . technology stocks and Bitcoin ). Property is often called “ inflation proof ” and while that ’ s not always the case given its sensitivity to interest rate rises , the stability of rental returns can often offset changes in value .
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