Capital gains slow but market still grows
August 01, 2016
So how is the market travelling? According to LJ Hooker’s recently released Open Market Report, capital city property values increased by 1.6% over the first quarter of 2016. While modest, it’s a move in the right direction following the1.4% fall recorded over the December quarter, last year.
While home values are still rising, some heat has come out of the market. Capital city dwelling values increased by 6.4% over the 12 months to March 2016, down from a recent peak of 11.1% annual growth recorded over the 12 months to July 2015.
For the first time since September 2013, not a single capital city recorded yearly growth of more than 10%. Sydney home values increased 7.4% over the past year, which is the city’s slowest rate of growth since August 2013.
The slowdown in housing market conditions comes after a strong cycle of growth which commenced in June 2012, with Sydney and Melbourne the main recipients of growth.
Interest rates are set to remain around historically low levels for some time. Additionally, investment activity is likely to remain strong considering the low returns in other asset classes such as cash and bonds and the volatility in equity markets that discourages many from investing heavily in shares.
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