Fuelling the property fire? The stir-crazy Australians seeking better homes and gardens

In March last year, when the apocalypse seemed upon us (fire, flood and plague, anyone?) and the most stable investment opportunity appeared to be 48 rolls of 4-ply, economists predicted a rapid collapse of housing prices – up to 32 per cent in some scenarios .

But, one year on, prices are in fact rising at the fastest rate in 32 years. Just last month, Sydney’s median price rose by $50,000 – that’s more than $1600 a day! And Melbourne prices rose by around $20,000, while similar increases are being seen all over the country.

House prices are rising fast across the country.Credit: Arsineh Houspian

Most seem to put this down to a few main factors: record low interest rates , the $200 billion Australians have amassed in savings , and an issue with supply and demand. And while, of course, these are all having a significant impact, few are mentioning one crucial ingredient.

Purchasing decisions are made emotionally.

When people are locked in their homes for months on end – working at home, exercising at home, eating at home, helping their kids learn at home, and trying to entertain themselves and little people at home – they start to really hate their home. Any good real estate agent knows that a buyer falling in love with a home is what sells it, but hatred is at least as effective as a motivator.

We sat in our homes last year and saw all the things we hated; all the ways it didn’t work for us and our family. We noticed that when the kids are watching TV or screaming at each other, there was nowhere we could work or have a cuppa in peace. We noticed that our partner making lunch in the kitchen ruined the vibe of the yoga class we were trying to do in the living room. And we really noticed that when you can’t take the kids to the playground, you’d give your last roll of Quilton for a backyard.

This is why house prices are rising much faster than apartment prices (4.4 per cent and 1.4 per cent respectively over the past three months); apartments are great when you’re out of the house at work all day and strapped for time – they’re easy to maintain, and tend to be close to local amenities. But when you’re stuck in them for long periods, especially with little kids, well, frankly, they suck.

Combine hating your home with cash in the bank and the ability to borrow big and you’ve got a recipe for a boom in housing demand, and prices. Let’s hope it’s not also a recipe for disaster.

Polly Dunning is a freelance writer.