The housing market has opened the year indicating a mixed bag of prospects. Although the December quarter was the strongest for several years, the recent pattern of price rises may not be sustainable in a slowing economy with rising unemployment.
Last year turned in a reasonable performance for investors with good capital appreciation and steady or modest rises in rental incomes. Low interest rates are welcome bonus. The 12 months ahead, however, may not be so straightforward.
But let’s recap: Across the country, residential property prices increased 9.3 per cent in the 12 months to December 2013, according to the Australian Bureau of Statistics. Sydney was by far the best performing capital, where the Residential Property Price Index increased 13.8 per cent for the year. Melbourne’s growth was up 7.9 per cent, while the Brisbane index increased 5.7 per cent.
The return of investors to the market in the second half of 2013 spurred on the market, as investors took advantage of low interest rates. Borrowings for investment purchases jumped sharply in the December quarter and the fall in the Australian dollar also saw international buyers returning to the Australian market in greater numbers – especially in Sydney. Read more in our Autumn Newsheet.