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Outlook for Homes,Units & Interest rates

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S Chacko, Director, Sydney Mortgage Plus

25 July 2002

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 occasional 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).

28 March 2008

Affordability

  • 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.

8 April 2009

Market Changes

  • The current markets have shown remarkable recovery from late last year but we have to wait till later this year to asses the strength of the recovery. In the light of the growth of the unemployed and various international factors our property market in the middle and higher price sectors will struggle.
  • The fixed rates appear to have bottomed and it may rise in the short term but could return to the low levels prior to rising steadily.

18 Feb 2010

Recovery

  • What a difference a year makes, from the depths of despair and gloom in the economy to solid employment growth has surprised most. This can only mean that our property market will continue the solid growth as long as rates remain within the current range, with some upside to be expected.
  • The fixed interest rates have come off slightly, whilest variable rates remains steady, this could see more investors moving into the various of growth areas such as WA, Southern Queensland, Sydney and Melbourne. The price blip we had in late 2008 and early 2009 will provide a springboard to strong price growth in the next few years.
  • Philip Lowe, Assistant Governor (Economic), Reserve Bank of Australia, in a speech today stated:" The housing sector is now firmly in the upswing phase of the construction cycle, and increased investment in the resources sector over coming years is expected to see investment, as a share of GDP, return to the very high levels seen in late 2008."
    Further Mr Lowe went on to say "inflation is moderating, and is expected to be consistent with the medium-term target over the next couple of years."
    The pressure on raising interest rate in the medium term is moderate and likely to favor investment in property as rental demands increase in major cities and other regional areas, even in Alice Springs!

3 May 2010

House prices jump 20pc

  • "House prices have surged by 20 per cent this year, giving the Reserve Bank board more reason to lift interest rates when it meets tomorrow. Figures from the Bureau of Statistics show a rise of almost 5 per cent for the quarter, and 20 per cent for the year.
  • It is the largest annual increase since the series began in the March quarter of 2002. Melbourne led gains with quarterly prices rising 6.7 per cent and annual prices up 27.7 per cent.
  • The strongest growth came from established houses with relatively high prices. "
  • "Annually, house prices rose in Melbourne 27.7 per cent, Sydney 21 per cent, Canberra 20.6 per cent, Darwin 17.5 per cent, Perth 15 per cent, Hobart 14.1 per cent, Brisbane 12.1 per cent and Adelaide 10.8 per cent.
  • source-ABC News Online

17 Jan 2012

Steady Growth

  • The housing market continues growth as our economy is the envy of other nations. The expected growth will accelerate as the investments in in North east Australia contiues to gather pace. The only cloud on the horizon is the European debit threatening to climax about the middle of the year
  • The following table shows the on going strength of the market
  • Area Median Value >

    Disclaimer:No warranty is made as to the information's accuracy or reliability, and Sydney Mortgage Plus Pty Ltd accepts no liability or responsibility for any direct or indirect loss or damage suffered. The information is not guaranteed or warranted to produce any particular results and the advise, opinions and strategies contained herein may not be suitable for every individual, therefore you must obtain independent financial advice.