The real estate market is hot here. It is completely a seller's market. I'll describe the rental situation, since that's what we just went through. The buying situation is similar but has additional nuances. Basically, all the apartments in this entire area are condos that people have bought. There are no traditional apartment complexes like we are used to in the States. So when a condo owner puts a unit up for rent, the listing goes through a realtor like anything else.
The main reason the market is so hot here now is because there is a severe housing shortage. That has caused housing prices to skyrocket. The average home price in this entire coastal area is about AU$380,000 and climbing. That average amount will likely only get you a really old home that would basically need to be demolished and rebuilt. A really nice home here would set you back closer to AU$500,000 minimum.
So it's not hard to see that only the rich can afford to buy a home in this area. Everyone else has no choice but to rent. This is causing rental prices to soar, so the lower class and students are only squeezed more. Realtors don't have to do much work to sell or lease property here. It's the buyers and renters who have to do all the work. The unit we finally rented had only just been placed on the market, and we were in the group of people who got the first viewing. Almost always, people from the first viewing will submit an application, so those who come later only have a slim chance of getting that unit. It's so competitive in Sydney, though, that people are out-bidding each other on rent!
I don't think the market can endure this much pricing pressure for long, but Australian lending practices are a bit more conservative than in the States. There's no subprime time bomb here. It will certainly be interesting to watch from the comfort of our new apartment (until we have to repeat the process again in twelve months).
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