20 May 2010

Property Growth to Continue Well Into 2010

Property owners can look forward to their investment growing in the New Year. House prices are already exceeding pre-global financial crisis levels nationally by nearly 3 per cent and growth is expected to continue well into 2010.

The phasing out of the First Home Owner’s Boost has had little effect on the lower-end of the market in the last quarter of 2009, and although interest rates are rising, this is not expected to affect prices until late 2010 and possibly 2011.

The markets in Sydney and Melbourne have led the recovery, with Melbourne in particular recording a stunning 12.5 per cent surge in house prices since March, with units also performing very well. Auction clearance rates have remained over 80 per cent over the last few months, cementing Melbourne as Australia’s auction capital. Last week Victorians spent a record amount ($963 million) on property.

The good news is that there are still bargains out there if you know the right suburbs to target.

According to Australian Property Monitors, a leading national supplier of property price information to homebuyers and sellers, it’s all about being armed with the right information.

Where to find the property bargains in 2010

For buyers or investors looking to enter the market there are still affordable options available nation-wide.

Economist for Australia Property Monitors, Matthew Bell, said: “If you are looking to enter the market, participate in the national recovery and get the best ‘bang for your buck’, Brisbane and Perth are the places to be looking. Queensland and Western Australia’s increased exposure to the downturns in both the resource and tourism sectors has meant that price recovery for both houses and units has trailed other states”.

However, it’s important to move now, as prices are likely to recover in early 2010.

“There are also opportunities in regions of Sydney and Melbourne where prices still remain under late 2007 levels even after the strong growth of the last six months.” said Bell.

Nationally, the suburbs offering the best growth opportunities for 2010 are:

In NSW: Mona Vale – houses Wolloomooloo – units

In Victoria: Mentone – houses Toorak – units

In Queensland: Hawthorne – houses Lota – houses Kangaroo Point – units

In West Australia: Halls Head – houses Nollamara – houses Mandurah – units

Property tips to help you snare that bargain

Matthew Bell, says, “When looking for property bargains it pays to do your homework to make sure you are choosing an area and a property that is likely to see your investment grow”:

  • Do your research – Research the property and the area. Locate recent and historical sales data for the area, auction clearance rates, rental yields, price differentials and trends to get a feel for how that particular market is performing. Up to date property information can be found at www.homepriceguide.com.au
  • Make a list – Make a list of your property non-negotiables, whether that’s an ensuite bathroom, close to shops or easy access to childcare facilities – just because a property is a bargain doesn’t mean it’s right for you or a potential renter.
  • Demographics are important – Consider the demographics of the area you’re looking at. An area that’s close to the city and universities may be more appropriate for an investment property rather than a more suburban area.
  • Local real estate agents are a valuable resource – Seek advice from local real estate agents who have expert knowledge and experience in the suburb you are interested in. They can help you locate the best buys.”

On the subject of property, Australia is now the proud titleholder of ‘the land of the world’s biggest homes’, topping the United States where houses are shrinking in size. The average size of homes in Australia is 215 square metres. In the US it has dwindled to 202 square metres. Third on the list is New Zealand, 196 square metres, followed by Denmark, 137 square metres and Greece, 126 square metres.

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