Australian housing market fares well - Australian Dollar hits 1.7600 against the pound

Discussion in 'Australia Property' started by Damian George, Jan 5, 2010.

  1. Damian George

    Damian George New Member

    AUSTRALIA'S housing market ended the year well despite recent interest rate hikes, talk of a recession and the phasing out of the first-home buyer grant. Over the first 11 months, home values rose by 11.3 per cent after their modest 3.8 per cent peak-to-trough falls in 2008.
    The data, compiled by property RP Data and Riskmark International, found the best-performing capital city was Darwin with values up 17.9 per cent during the 11 months.
    Adelaide was the worst, recording just a 5.7 per cent increase.
    Christopher Joye, managing director of Rismark International, said the figures indicated the Australian housing market was less sensitive to interest rate rises and the removal of the government stimulus than previously thought.
    "The story here is we saw quite spectacular growth in contrast to the quite pessimistic predictions," he said. "The key driver of Australian housing demand in the latter half of the year appears to have been upgraders and investors. We expect this trend to continue in 2010."

    Of the rental markets, Darwin came out on top again with gross rental yield of 5.7 per cent for houses and 6 per cent for units.
    Melbourne was the worst with gross rental yields of 3.7 per cent for houses and 4.4 per cent for units.
    SQM Research managing director and property expert Louis Christopher said he believed renters were in for a rocky year with rents set to continue rising.
    "Rents continued to rise in 2009, particularly in the medium to affordable end of the market, and I expect that to continue into 2010," he said. "I wouldn't be surprised if rental growth tops 7 per cent."
    Mr Christopher also said the phasing out of the boost to the first-home buyer grant, to take effect from today, would "seriously hurt" the property market. "There will be an impact on the market. Because of the wind back to the FHOG, it will be a considerable factor to the slower house price growth in 2010," he said.
    "Holiday homes and prestige property will see a major return and will be the best performers. The affordable end will still record growth but not as robust because of the scale back.
    "Nationwide we are going to see 4-6 per cent house price growth as an average for 2010."
    Real Estate Institute of Australia president David Airey said that despite the prospect of further interest rate rises this year, he was optimistic buyers would continue to return to the market.
    "Australia has a passion for real estate. Although we've been through a huge storm following the financial meltdown, many think we got out of that fairly easily," he said.
    "The buyers are there and they are looking out for property."

    For the full story visit www.news.com.au
     
  2. KateMelb

    KateMelb New Member

    The reality is that there is a huge gap between supply and demand in Australian housing, especially in big capital cities like Melbourne. We are simply not building enough houses to cater for buyer demand, so scarcity is pushing up prices at a rapid rate, especially within a 10-15 km radius of Melbourne's CBD.

    Investing in public housing costs the government a fortune and is not a vote winner. The government simply cannot afford to interfere with negative gearing and disrupt the supply of rental accommodation provided by investors. Therefore investing in residential property is an excellent strategy in Australia, especially in areas like inner Melbourne.

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    Last edited by a moderator: May 31, 2014
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