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Cities of dreams as value of homes begins to soar
Author: Tim Lawless
Date: October 6, 2009
Clearly Sydney and Melbourne are leading the property market recovery and now represent two of the nation's most popular markets.
RP Data's national home value indices published last week reveal that for the first eight months of the year Sydney home values rose 8.6 per cent, to reach a new median value of $546,867.
Melbourne also put in a stellar performance and has found its feet again to record a stunning 11.6 per cent price increase, bringing the median value up to $467,280.
These buoyant conditions are in stark contrast to the same period last year, when values were falling, sales volumes were at rock bottom and only 45 per cent of auctions were clearing.
Now we are seeing house values rising, market activity increasing, and almost three-quarters of auctions are recording a successful result.
While the sceptics have touted this as a potential market bubble waiting to burst, the figures confirm that the residential market is protected from a downturn in values by a broad range of factors.
Interest rates are at historic lows and — although rates will be lifted over the coming months — we will need to see a rise of 150 basis points before mortgage rates reach their 10-year average of 7.3 per cent.
Importantly, housing is in undersupply and the nation's population is growing at a faster rate than in any other country in the Western world.
Australian development is being underpinned by the fastest rate of population growth since the baby boomers.
Other factors such as the health of the financial sector and lower-than-expected unemployment figures are also likely to support the housing market.
Over the next six months capital growth is likely to moderate across the Australian market.
Interest rate rises, together with a winding back of the boost to the first-home owners' grant, are likely to dampen demand.
Tim Lawless is the national research director of rpdata.com.
Source: The Sun-Herald
Cities of dreams as value of homes begins to soar
Author: Tim Lawless
Date: October 6, 2009
Clearly Sydney and Melbourne are leading the property market recovery and now represent two of the nation's most popular markets.
RP Data's national home value indices published last week reveal that for the first eight months of the year Sydney home values rose 8.6 per cent, to reach a new median value of $546,867.
Melbourne also put in a stellar performance and has found its feet again to record a stunning 11.6 per cent price increase, bringing the median value up to $467,280.
These buoyant conditions are in stark contrast to the same period last year, when values were falling, sales volumes were at rock bottom and only 45 per cent of auctions were clearing.
Now we are seeing house values rising, market activity increasing, and almost three-quarters of auctions are recording a successful result.
While the sceptics have touted this as a potential market bubble waiting to burst, the figures confirm that the residential market is protected from a downturn in values by a broad range of factors.
Interest rates are at historic lows and — although rates will be lifted over the coming months — we will need to see a rise of 150 basis points before mortgage rates reach their 10-year average of 7.3 per cent.
Importantly, housing is in undersupply and the nation's population is growing at a faster rate than in any other country in the Western world.
Australian development is being underpinned by the fastest rate of population growth since the baby boomers.
Other factors such as the health of the financial sector and lower-than-expected unemployment figures are also likely to support the housing market.
Over the next six months capital growth is likely to moderate across the Australian market.
Interest rate rises, together with a winding back of the boost to the first-home owners' grant, are likely to dampen demand.
Tim Lawless is the national research director of rpdata.com.
Source: The Sun-Herald