25 July 2002
Hello,
Here is a brief overview of the property investment environment in the period 2002 and 2005.
Interest rates:
- Unlikely to increase significantly in the next 12 months thanks to slower then expected
growth in USA and the share market meltdown.
- With occassional short upward spikes the share market should keep going down for the next
two years.
- The rates here are likely to go up 0.5% pa over 12 months.
- Looking forward, the period to 05- 06 will see steady raise in rates till it reaches a peak in 06.
- Variable rates are likely to go from the low 6.4%pa now to 9% by 2006.
- If rates are tightened earlier then the rates may not go as high.
Property Markets:
- The reduction in demand due to changes in FHOG will be significant in the next 12 months, the push pull effect will be felt in all price ranges.
- However due to the growing migration, wealth creation and wages the markets will approach boom conditions again by 05.
- The Sydney market will see steady growth, say 2.5%, but not the price raises we have seen in the last few years as supply largely meets demand.
- Melbourne growth will be steady for 12 mths, some strong growth for 03-04 as there is still a shortage of dwellings.
- Brisbane will have very strong price growth as population growth fuel demand into 05 (except for the next 12 months).
More people will shift into bricks and mortar as secure source of retirement income rather than other forms of investment, but driven by yield. Self managed Super?
Non residential properties are more likely to do well between now and 2005 as lenders switch preference from residential, as usual as we approach the last phase of a price blow out.
Samuel Chacko
28 March 2008,
House prices are expected to rise by 40% as
Australia's housing affordability crisis is expected to dramatically worsen during the next five years, with property prices forecast to rise by as much as 40 per cent.
Economic forecaster BIS Shrapnel says housing affordability, already at record lows, will decline even further in the years ahead as demand continues to outstrip supply.
BIS Shrapnel director and chief economist Frank Gelber said an annual construction shortfall of 30,000 dwellings was set to double to 60,000 by June this year and rise to 129,000 by June 2009.
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