Property Update - August Newsletter19-Aug-2009
Property Update August Newsletter
The REIV June quarter medians revealed that two-bedroom houses in the outer east had the largest increase in median price of houses in Melbourne. The median price of a two-bedroom house in the outer east increased by 13.6 per cent from $347,625 to $395,000 which is a very strong result compared to the increase in the metropolitan median of nine per cent over the quarter. this increase in median price is largely due to first home owners. So where is the Outer East you say - these are 20+ km East from the CBD. Think Rowville, Ferntree Gully, Narre Warren, Upway and the like. Like to read more click here.
In addition to this, both the proportion of home loans to first home buyers and the average loan amount has increased considerably in the last 12 month. The proportion of home loans given to first home buyers has increased from 19.9 per cent to 28.4 per cent whilst the average loan for a Victorian first home buyer has increased from $231,400 to $255,900 over the past year.
There are also signs that the there is recovery in the top end of the market with the median of four-bedroom homes in the inner east (within 10 km of CBD) increasing by 12 per cent to $1.4M and the median of three-bedroom homes in the inner south increasing by 10.9 per cent to $1.015M.
So, in a nutshell, prices are on the way up again as consumer confidence strengthens - probably as a result of Australia having weathered the global financial crisis much better than other countries!!!!
The flip side to this of course, is that interest rate rises are becoming a distinct possibility in the near future. Whilst the interest rate was kept on hold last month, there are certainly signs that the next rate change will be rates going up, not down! Please factor this into your financial equations. And what are rental prices likely to do? Rental prices have increased between 12-15% nationwide over the last year or so. It is expected that the rises will continue, albeit at a slower rate.
See http://www.yourinvestmentpropertymag.com.au/article/fastest-growing-rentals-80298.aspx for more details