Housing market reflections
Investors wondering where to begin their next residential real estate venture may be interested in a recent report from RP Data.
It seems that there may be a housing recovery in the making, as the RP Data‐Rismark September Hedonic Daily Home Value Index Results released today (October 2) indicates that
Australia’s capital cities have experienced a 1.4 per cent rise in their dwelling values over the month of September.
Results over the quarter are also positive, representing the best result since the May quarter of 2010 with a two per cent capital gain.
Once again, results vary for different areas across the nation – so you may be wondering, why the sudden upswing in the property market?
Last month’s results are indicative of a few factors, including interest rates and economic strength.
For example, the fact that Darwin experienced the greatest rise in dwelling prices in the three months to September (3.9 per cent) is likely a reflection of the Northern Territory’s economic progress, fuelled by its burgeoning resources sector.
Darwin also recorded the highest gross rental yields over the quarter, posting six per cent yields for both houses and units.
RP Data’s research director Tim Lawless attributed the improvement in the housing market to interest rate decisions actioned by the Reserve Bank of Australia.
“It’s no coincidence that housing market conditions bottomed out at the end of May, after the Reserve Bank cut the official cash rate by 50 basis points,” he said.
“A further cut of 25 basis points in June and the anticipation of further rate cuts in the pipeline appear to have instilled renewed confidence in the housing market which has driven the growth in home values.”
Housing market results in the coming months will demonstrate if the September quarter’s performance was a temporary upswing or if the industry is indeed experiencing a recovery.
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