Thinking about buying a house this year? Before you start exploring property listings, brush up on your knowledge of the property market in your area. To help you get started, here’s a snapshot of the property markets around Australia.
Looking back on Australia’s property market in 2016
The year ended on a high note, as property prices regained momentum in 2016 following additional interest rate cuts by the Reserve Bank of Australia (RBA)1.
While most capital cities saw an increase in property values, Core logic reports that Perth and Darwin were the only capital cities where property values decreased2, which may be reflective of an ongoing shift in the mining industry.
Core logic reports that gross rental yields (i.e., total income from rental properties before deductions) reached a historic low of 3.2% late last year1. It is due to the increase in property value.
So, if you’re looking to start or grow your investment property portfolio, you might want to talk to your broker about the best investment solutions for you.
What we can expect in 2017
Depending on what you’re after, 2017 might be your year. NAB Economics forecasted a further cut to the official interest rate in November 2017, and where this is the case, the trend of property prices may continue to increase.
An oversupply of units and apartments in capital cities has impacted the growth rate for Sydney, Melbourne, and Brisbane, according to Corelogic3. This oversupply is expected to slow the growth of property demand in these cities.
As of 31 January 2017, Core Logic reports that the value of houses and units continues to rise for most capital cities4. Perth and Darwin are again the only capital cities to see an overall decline in value year on year. Darwin saw a decrease of 2.94% in the value of its houses, while its apartments increased in value by 8.49%. Both Brisbane and Perth saw apartment values decrease by 2.72% and 3.82% respectively.
As expected, Sydney and Melbourne have seen the most growth since January 2016. However, Hobart saw the highest month-on-month price increase, despite seeing a drop in apartment values. Your mortgage broker will be able to help you navigate the changing property market, so if you’re thinking about moving house or are looking to invest, talk to your broker about opportunities that might be right for you.
4 www.corelogic.eom.au/research/monthlyindices.html as at 31 January 2017
Author: Alan Faint, http://www.hfcahobart.com.au/