2014 is set to be an exciting year for property, with many analysts predicting that prices will continue to climb at a moderate pace in most, if not all, capital cities.
Over the course, of 2013, many of Australia’s capital cities enjoyed strong growth in dwelling values, most notably Sydney, which recorded double digit growth over the last calendar year.
According to research, home values in Sydney climbed by more than 11% throughout the course of 2013. Similarly, there were a handful of other capital cities that recorded strong growth in dwelling values, including:
Melbourne - 7.8% rise
Perth - 6.9% rise
Canberra - 3.9% rise
Brisbane - 3.4% rise
Of course, with price growth like this, buyers who are thinking about purchasing real estate in 2014 may understandably be concerned about high barriers to entry.
Predictions For 2014
Some potential investors fear that the sharp increase in home values in the past year indicates that the Australian housing market is in a property bubble that will soon pop and subsequently bring prices down. However, overall home prices are still down since the highs of 2010. Current low mortgage interest rates have improved the market by allowing more people to afford housing.
Experts feel that decreasing interest rates will continue to make housing more affordable for first-time buyers. Predictions that housing rates will fall as much as 60% in 2014 have been discredited by real estate experts across the country. An economic downturn that would cause real estate prices to drop significantly would have to be triggered by a sharp decline in available jobs, however the unemployment rate in Australia has been fairly steady for nearly four years.
Buyers should be aware that the recovering trends in the real estate market will cause prices to increase steadily over 2014. More buyers in the market in Sydney could push prices up 15 to 20% in 2014. Further to price rises, the scarcity of the volume of housing actually on the market is another concern. Sydney is feeling the pressure of supply and demand, leaving Sydney first-home buyers with little bargaining power over investors with more capital.
Other predicted increases in Australian cities include:
Melbourne - 4 to 8% rise
Brisbane - 4 to 8% rise
Darwin - 3 to 6% rise
While there is no way to make a completely accurate prediction of the future of the real estate market, Australian analysts predict the strong market of 2013 is expected to carry over into the New Year and beyond.
It helps to have someone you can turn to for trusted advice when the market is unpredictable. For further information, and to put yourself in the best position with valuable information and guidance, contact a trusted consultant from Mortgage Choice on 07 3286 7711.
Information sourced from The Australian, Property Observer, Your Investment Property magazine and Yahoo Personal Finance.