Investment Property: Australia to see a rise in the property market
Over the next three years, market analysts expect that prices will rise consistently, bumping up houses currently valued at $670,000 to $795,000 in 2016.
The increase is a result of property demand in Sydney partnered with an improved affordability of housing thanks to low interest rates.
This is great news for the current property market which has managed to stay reasonably stable through the global recession. While the recovery will be uneven among the states, particularly in 2014/15, the growth is encouraging for investors.
Other major cities are also expected to see significant increase in their property market with prices in Brisbane expected to increase up to 17%, Perth 15% and Darwin 10%.
Melbourne, Adelaide, Canberra and Hobart are expected to rise only 5% due to a recent balance of housing availability and demand.
“Thanks to recent strong peaks in construction that exceeded the demand for new dwellings, Victoria, South Australia, Tasmania and the Australian Capital won’t reap the price rewards like other states,” said BIS Shrapnel senior manager and study author, Angie Zigomanis to The Property Observer.
“Economically, these states are also under-performing due to a fall-off in construction and a negative impact to industry from the high Australian dollar,” she said.
The strongest growth is expected over the next 12 months and will then taper off as unemployment and a lack of population growth affect the property market.
Rental prices are also expected to rise in the due to demand and recent weak price growth.
Zigomanis said the general improvement in residential markets since the latter half of 2012 has been initiated by the low interest rate environment.
“Since October 2011, the official cash rate has fallen by 200 basis points, translating to a 160 basis point fall in variable rates. As a result, we are seeing some improvement in some residential market indicators,” she said.
“Lending to both owner-occupiers and investors has been trending upwards.”
She said while current low interest rates will encourage retail spending and more property construction, by June 2016 all property markets are forecast to be impacted by rising interest rates as the Reserve Bank moves to neutralize rates over 2015 and 2016.
Article based from and article on http://www.propertyobserver.com.au (Written by Larry Schlesinger)
written By Jordan Cox
Powered by Facebook Comments