The real estate market is already off to a flying start this year. Investors and home buyers who are thinking about making a purchase in the coming months can look at the activity we have already seen in 2014 to get an idea of what is happening in the property market.
While prices did climb in 2013, with research from RP Data showing property values jumped 9.8% across the combined capital cities; historically low interest rates should make buying a home or investment property more affordable.
An overview of the Australian real estate market
Economic recovery has allowed more people to become property owners over the past few months. An increase in jobs and a decrease in unemployment in major cities have allowed more people to relocate and make a purchase instead of renting. The housing market is expected to remain strong throughout the remainder of 2014.
Some key factors that are expected to contribute to the strength of the market include:
- A positive outlook from both property owners and tenants
- An increase in the number of commercial spaces that are being converted to residential buildings
- Steady increases in the cost of residential properties
Real estate trends in major Australian cities
Looking at the economic climate in individual cities can help buyers decide which areas are best for housing investment and ownership.
Sydney is expected to see housing values grow by 10% throughout the year. Increases in the month of March are likely to be between 0.5 and 1%. The property market surged at the end of 2013, so buyers can expect prices to continue on a sharp incline throughout the beginning of 2014 with growth to settle by mid-2014.
Canberra continues to enjoy steady growth in unit sales. Decreasing interest rates are attracting more buyers to the city, but an oversupply of rental units - due to construction completed in 2013 - has decreased rental prices overall. Investors may not enjoy their returns if they decide to purchase rental properties in the city.
Melbourne will continue its impressive recovery in March. More people are moving to the city to take advantage of low interest rates, so buyers can expect competition to be fierce but worth the fight.
Brisbane is a city that has seen slow and steady growth. Great deals can be found in outlying suburbs around the city, and investors may enjoy high rates of return once the steady growth of the city's real estate market reaches these suburbs.
Perth is expected to perform reasonably well yet again this year, with industry pundits predicting property price growth of at least 5%.
If you'd like more information on how the latest market information can inform your investing decisions, talk to the home loan experts at Mortgage Choice today.