Residential upturn anticipated for capital cities across the nation
Sydney and Perth are experiencing a residential property boom, with the demand for land across the two cities increasing, which could be fantastic news for anyone interested in buying land for investment.
The latest BIS Shrapnel report, 'Outlook for Residential Land, 2013 to 2018', has found that the market conditions in both Perth and Sydney have helped provide a boost to the overall residential growth in the cities.
Low new dwelling construction rates resulted in a lack of homes for the population, while affordability of property has recently increased due to a combination of weakening house and land prices, and lower interest rates.
Angie Zigomanis, senior manager at BIS Shrapnel and the author of the report, said that the development of new subdivisions in the two cities is helping to meet the "pent up demand".
Speaking about Perth's property landscape, Mr Zigomanis said in a September 16 statement: "The combination of lower land prices, income growth, and lower interest rates meant that by 2012 the purchase of houses had improved to its most affordable level since the early part of the mid-decade boom, which in turn helped provide the impetus for the growth in demand and prices over 2012/13."
Sydney has also experienced a number of changes over the last few years, with the cost of land falling during 2008/9 and an increase in the price of existing houses during 2009/10 helping to stimulate the new dwelling market in recent years.
"Lot production has improved from a record low of 1,400 lots in 2008/09, but has averaged around 4,300 lots per annum over the last three years," said Mr Zigomanis.
"Further growth in this period has been constrained by the small number of operating subdivisions resulting from the earlier collapse in the market which has resulted in future buyers camping out ahead of land releases to secure a block of land."
Furthermore, Brisbane is gearing up to enter a similar state of growth. While lot production has fallen to its lowest point in 20 years during 2012/13, it is expected to experience a turn around towards the end of 2013 and heading into 2014.
With the amount of overseas immigration occurring in Queensland, the report details an expected dwelling deficiency, which will then lead to the necessity for more property construction in the near future.
Coupled with the increasing house affordability across the nation, there is an expected moderate growth for the state in the coming months, with property confidence increasing alongside demand.