Earlier this week the Australian Property Institute released the results of their 34th Property Directions Survey
Among the results were some interesting opinions on the Sydney Melbourne and Brisbane property markets, so Your Investment Property Magazine asked an expert from each of those cities for their opinionon those markets.
Rich Harvey – Property Buyer
I don’t believe Sydney is in a bubble, when you look at the current price cycle we’re in house prices in Sydney have risen by 39% over three years, when you look at the last national boom we went through prices went up by 60%, so right now we’re only two-thirds through that.
Supply is the number one reason prices are rising.
It’s basic economics, yes interest rates and foreign money are playing a part, but right now there is a strong demand and it is outstripping supply.
I think we’ve still got five to 10% more growth in Sydney in this cycle, over the next 12-18 months I don’t foresee growth stopping.
For me the biggest headwinds for property prices are the tightening APRA regulations as banks don’t have the same appetite for risk, the slowing economy and affordability with wage growth not keeping in line with price growth.
Helen Collier-Kogtevs – Real Wealth Australia
I believe that Melbourne isn’t entering a bubble. Parts of Melbourne are certainly experiencing high capital growth but this I believe is the usual recovery that occurs after a downturn.
Historically after a downturn, growth recovery is rapid for a year or two until it hits the long term capital growth trend line.
So long as interest rates stay low, then I expect that Melbourne prices will continue to rise over the next 12 months.
Because of the economic transitioning from mining boom to production that is occurring at the moment, I believe the RBA will not be increasing interest rates within the next 12months or even longer.
In fact I believe that there is a real possibility that they will further reduce interest rates before the end of the year.
I believe that price growth that Melbourne is currently experiencing is largely due to the usual recovery after a downturn.
Low interest rates have definitely fanned this growth but I believe that this is not the major factor.
Zoran Solano – Hot Property Specialist Buyers Agency
I definitely don’t think Brisbane is in a bubble, I think our property market is warming but I don’t think it’s running away in a bubble fashion.
Interest rates are definitely a large factor, we’re seeing a lot of renters who are looking at the rates and deciding it’s time for them to become buyers and a lot of home owners and investors who are looking to
upgrade right now.
Another key driver in my opinion is the interest we’re getting from interstate buyers, usually I don’t like to look at median prices but Sydney and Melbourne medians are up to double where Brisbane’s at and a
lot of people from interstate are seeing that and realising there’s good value to be had.
I think we’re going to see good, sustainable growth over the next two years and that’s what the Brisbane market needs.
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