Published : 20 March 2015
The moment is probably the perfect one to consider selling your house since property prices across the biggest Australian cities are expected to continue increasing until the end of 2015, a new industry report suggests.
The latest index data show that property prices in the country’s capital cities have gone up 0.3 per cent in February. On an annual basis, the increase in property prices has reached 8.3 per cent. Sydney is in the lead with the highest increase, followed by Melbourne and Brisbane.
Although the housing price growth is expected to continue throughout 2015, it is also going to slow down in comparison to data for previous periods. Brisbane is expected to be one of the best performers and it will outshine other big cities in the country when it comes to an overall increase. The rise for Brisbane by the end of the year is expected to be six per cent.
Regardless of the constantly growing prices, investor activity has also been at an all time high, the Australian Bureau of Statistics reports. Interest in property in the capital cities is one of the factors that have contributed to the steady growth in prices.
Foreign Buyers and Their Influence on the Real Estate Market
According to an ABC Online report, nearly nine per cent of the first time property buyers in the country are foreigners. According to analysts, the same prediction can be made about bigger market trends that involve other real estate sectors, as well.
The trend is especially noticeable in Sydney, as well as the country’s other capital cities. These urban areas seem to be the places attracting the biggest majority of foreign real estate investment.
Though some speculate that the extensive foreign investor interest is the one factor that has contributed to higher property prices, other analysts believe that more profound market forces are at play.
Most analysts seem to believe that governmental regulations have led to the loss of balance between the limited market supply and the relatively high demand. First-home owner grants and the lenient lending requirements have also contributed to the trend that has been affecting the sector over the past few years.
Commercial Property Market is Also Seeing Growth
The residential property trends are obvious and easy to understand. It’s also interesting to note that similar developments are taking place within the commercial real estate niche.
Over the past five years, there has been serious investment in commercial property construction. Canberra has been the leader with an increase in property availability of 18.9 per cent. Brisbane follows with 16.2 per cent.
International investment and stable business environment have both contributed to an increased demand for office spaces. This is one of the main reasons why the particular real estate sector is also expected to maintain the current prices and even experience some increase.
2015 and the Property Market Slowdown
The latest forecasts suggest that 2015 is going to be the year during which the residential market growth is going to slow down.
Currently, the Australian housing market ranks among the most expensive in the world. The national projections for 2015, however, envision a four per cent increase in property prices on the average. The slowdown is significant in comparison to the seven per cent average increase for 2014.
Still, property prices are expected to remain stable and high, despite the slowdown. As a result, rental properties will continue being an attractive option in the capital cities throughout 2015. A slight increase in home ownership decline is also expected by the end of the year. The trend will be especially noticeable in particular market segments like first time home buyers.