Residential property prices change – adapting to conditions in the economic environment. Fluctuations in residential property prices are affected by macroeconomic and microeconomic conditions.
What are some economic factors that affect property prices? In this and future blog posts, we explore some of the factors affecting the residential property market and explain how they impact on price. In this first edition of a series of blog posts, we introduce four macroeconomic (macro) and microeconomic (micro) influences.
Defining macro and micro influences
Macro influences are big-picture economic factors, which relate to how the economy performs overall. For example, macro factors that are correlated to property performance are employment, population growth, inflation and GDP.
What about single-market influences? Examples of single market influences are supply and demand and consumer attitudes. These factors fit within the term microeconomics and signify how the economy is performing within that sector.
Macro and micro influences can be at a national level, state-level or even a city level. In this series, we shall explore influences on a state level.
Four drivers of residential property
We’ve selected four drivers that influence the residential property market in Perth, which are:
- Population & Demographics (Macro)
- Jobs & Unemployment (Macro)
- Supply & Demand (Micro)
- Consumer Confidence (Micro)
In this series, we’ll cover each of the above drivers in more detail. While we’ll be covering each individually, it’s important to note that none of them should be considered in isolation. They regularly interact, and the best decisions will come through understanding the importance of them all.
How can you use these to your advantage?
Whether you’re a potential home buyer or an investor, understanding the property market and its drivers can help you to make smart decisions. Many of us are familiar with the property-specific influences that alter pricing, such as location, size, build quality and inclusions. However, even a property that ticks many of these boxes is susceptible to the overarching economic factors that can affect price. By understanding and mapping macro and micro trends/factors, you can make an informed decision on the future potential of your property.
Investment opportunities with Norm Carey
Property investment is a popular way to grow your net worth and opportunities present all the time. With a portfolio of over 100 completed projects valued at over $2bn, a seasoned developer such as Norm Carey can help you to make a sound investment. Visit our blog for more news on real estate in Perth or contact our team for expressions of interest on new and upcoming projects.
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