Record low interest rates is a great incentive for new buyers to enter the Australian property market. Declining clearance rates provides a shift in bargaining power to buyers who have greater time to negotiate with vendors.
Many economists are predicting a further drop in interest rates later this year due to the low inflation figures.
The Australian dollar appreciated slightly due to an increase in commodity prices and global monetary developments.
- BREXIT and Trump US election- creates greater uncertainty on global assets for example property. Greater reason to invest in Australia which is currently a relatively more stable economy.
- RBA has left interest rates on hold at 1.50 % in June 2017.
- The Australian dollar is 0.77 USD & 0.58 GBP 2nd July 2017.
- The unemployment rate dropped slightly to 5.7% in April 2017.
- Inflation remains low at 2.1% for March quarter 2017.
- The national median house price increased by 1.9 % last quarter, with Sydney as the standout city where mediam house price reached $1 million.
The Sydney property market has cooled off with increased supply of property in the market and investors being more cautions following local banks increasing rates for investors home loans. This increase is the banking industry's response to APRA's (Australian Govt) directive for banks not to increase investor home loans by greater than 10%.
Brisbane has seen a solid 5.5% annual price growth with alot of interest from the investor market. Improving tourism market has seen related improvements in Brisbane and Hobart. The mining boom has ended with Perth and Darwin continuing to suffer. Canberra and Adelaide has has moderate growth of 4.5% and 2.8% respectively and expected to maintain these levels through 2017.
Sydney's current clearance rate in March 2017 is 82%. Sydney is still viewed by many local market commentators as a healthy market. While Sydney is coming out of the perfect storm there are still growth opportunities. With low clearance rates now is the time for buyers to negotiate with vendors for the right price whereas previously vendors could dictate prices.
Quick Snapshot of Capital City Quarter Results:
2016 year-on-year results;
- Sydney: +10% growth, median price $781,600
- Melbourne: +11.1% growth, median price $560,000
- Brisbane/Gold Coast: +5.5%, median price $455,000
- Adelaide: + 2.8%, median price $405,000
- Perth: -3.3%, median price $510,000
- Hobart: + 6.2%, median price $315,000
- Darwin: - 2.9%, median price $515,000
- Canberra: +4.5%, median price $535,000
market wrap summary
With record low interest rates and low Australian dollar, now is the time to invest in Australian property.
Sydney and Melbourne are still the stand out cities for property. Strong demand for Brisbane which should see growth levels continue to increase.
Many property commentators predicting strong growth in Brisbane and the Gold Coast.
Perth has excellent value close to the City however property prices are not appreciating in the short term.