Victoria shows property investment potential
While Victoria’s economy may not be charging along quite as well as its resource-rich counterparts, there are still a variety of property investment potential and opportunities in its urban center.
Melbourne has experienced major improvement in home values, according to a joint report recently released by RP Data and Rismark.
“Melbourne home values fell by 10.5 per cent between October 2010 and May 2012 after rising by 36.7 per cent between the start of 2009 and the market peak,” RP Data’s research director Tim Lawless explained in a statement issued October 2.
“Since the May trough, Melbourne values have recorded a four per cent surge which is the largest recovery so far across all the capital cities.”
And while rental yields are lower in Melbourne than all of the other state capitals – houses with gross rental yields of 3.6 per cent and units at 4.3 per cent – there are other signs of a market upswing.
September building approvals reported by the Australian Bureau of Statistics (ABS) have seen positive numbers coming from Victoria. The state government issued a statement outlining its performance which shows Victoria has property investment potential.
Melbourne leads the country in both residential and non-residential building approvals, posting a 23.3 per cent increase in construction activity.
That number reflects 4,322 dwellings valued at roughly $1.8 billion and accounts for 36 per cent of Australia’s total construction activity, said state treasurer Kim Wells.
“Residential approvals in Victoria are the reason behind the increase in construction activity across Australia.”
The increase in activity may be further supported by the recent interest rate reduction actioned by the Reserve Bank of Australia.
Property pundits now have their eyes on the banks to see how much of the 25 basis point reduction will be passed on to borrowers.
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