We spoke with Property Investment Consultant, Jarryd Gauci at leading Property Investment Consultancy, Meridian Australia, about the performance of the residential property market this year and the projections for the coming months.
Gauci states, “Property prices eased somewhat in April compared to the record high month of March, where property prices jumped 2.8%. March was the highest level of growth in the Australia residential property market since October 1988 (3.2%)” .
Seeing prices come off the boil a little shouldn’t be a deterrent for investors and potential homeowners trying to break into the market.
The property market in April experienced a positive month across all capital cities, seeing prices appreciate by an average of 1.8%, as noted by CoreLogic Australia .
CoreLogic Australia’s Daily Home Index below illustrates the property market over the last 12 months, drawing on what each capital city experienced.
It’s clear that every city in Australia experienced a strong turnaround in property prices since the pandemic first hit, with the smaller cities even reaching double-digit growth.
The continued record low-interest rates and strong demand from both home purchasers and investors have contributed to the sustained growth experienced across the nation.
With any residential property market, there are markets within markets. Therefore, a blanket approach can not be used when comparing the performance of the market.
At Meridian Australia, we break out analysis down into state-by-state, the suburb specific analysis. In assessing the recent performance of the market, below I highlight the key findings for the largest capital cities:
Just when many thought Sydney would continue to bottom out due to the effects of COVID-19, the market’s momentum has completely shifted. The market has experienced an 8.8% raise, the largest increase in price for the quarter out of all the capital cities .
Melbourne has also bounced back realising 5.8% on the back of the pent up demand due to past lockdowns and additional government stimulus that flowed through into the first quarter of 2021 .
Brisbane has offered affordable prices for both potential home purchasers and investors for some time now, especially compared to the bigger cities of Sydney and Melbourne. On the back of this strong affordability, ongoing interstate migration, as well as benefiting from the low mortgage rates and government stimulus, the market fundamentals look to be aligning.
The Brisbane market has now experienced solid growth, and in the last 12 months has realised a total of 8.3% growth. 5.6% of this increase was in the first quarter of 2021 alone .
It is clear that many cities across Australia have entered a ‘Boom’ phase of the property cycle and the big question is, for how long will prices continue to rise?
There’s no simple answer and it’s important to remember that each city can be a different stage of its own property cycle. We need to consider many factors such as affordability, the current price points being offered and how long prices have been increasing not only within a city but a given suburb.
Property prices across the country are thriving at the moment and one major contribution is the historic low-interest rates on the back of the RBA cash rate holding firm.
What looks to be positive on this front and whether prices can continue to increase, is that last month, the RBA released a statement that noted conditions for a rise in the cash rate are not expected “to be meet until 2024” at the earliest” .
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*Disclaimer: When considering purchasing property, it is always prudent to seek the advice of an appropriately qualified professional to determine which strategy is most appropriate for your circumstance.