Sydney, Brisbane and Perth the ones to watch?

Good blog post from Residex's John Edwards this month with some great charts plotting recent growth rates for most capital cities.

It paints a very interesting picture of where the Aussie properties markets are at in the cycle...

Australian-Trend_Residex_August 2011

Melbourne-Trend_Residex Aug 2011

Sydney-Trend_Residex_August 2011

Residex's view of the world is:

  • we have probably reached the top of this interest rate cycle and from here rates will be decreased. We expect an adjustment to take place before the end of the year in the order of 0.5 per cent and the rate to remain at the reduced level for the following 12 months.
  • Brisbane and Perth should move to growth within the next six months. This means that we are in a period where there will be bargains with these bargain priced properties having sale prices below their intrinsic value.
  • Sydney, Brisbane and Perth it is very reasonable to expect weekly rental increases. These increases make investment in these cities attractive given a situation where any rise is likely to take place against a backdrop of decreasing interest rates.
  • Sydney, Brisbane and Perth there will be suburbs that are advancing faster than others and are already starting to move forward.
  • Market performances are not uniform. There are some areas that are just starting the correction process while others have move beyond this process and are presenting growth. Sydney falls into this later category with this market having the most significant stock shortage at 20,000+ dwellings on our estimations.
  • Melbourne is currently presenting as if there is a serious risk of falls. The city is in the early stages of the correction phase and is a market where there needs to be caution. Many people will fail to realise that this market is correcting and will be focused on the recent quality returns. The current trend points to continued worsening adjustment for at least another six months. The correction process is likely to take the best part of two years as there is a significant stock overhang (we calculate the surplus to be in the order of around 20,000+ dwellings).

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