Potential investment opportunities arise from capital city value growth
Australia's capital cities have undergone some impressive dwelling value growth over the last few months, with the latest RP Data-Rismark Hedonic Home Value Index illustrating the rising property prices seen across the nation's metropolitan hubs. This could highlight a great opportunity for those interested in selling a house in the near future, especially with the population growth beginning to occur in some of the larger cities.
Over March, dwelling values in Australia's capital cities rose 2.3 per cent, while the first quarter of 2014 saw these prices increase 3.5 per cent. With these degrees of growth expected to continue well into the rest of the year, now could also be a great time to consider purchasing investment property in these cities. Furthermore, every city except Perth experienced a rise over the last three months, as the nation's real estate industry continues to recover.
More specifically, Melbourne saw the largest degree of dwelling value growth over the quarter, increasing 5.4 per cent, followed by Hobart (4.7 per cent), Sydney (4.4 per cent), Darwin (2.8 per cent), Canberra (2 per cent), Brisbane (1.5 per cent) and Adelaide (1.2 per cent).
RP Data Research Director Tim Lawless said half of the Australian capital cities are now posting record-high dwelling values, with Sydney leading the national trend.
"Sydney dwelling values are now 15.8 per cent higher than their previous peak, substantially more than Melbourne where dwelling values are 4.7 percent higher than their previous peak," said Mr Lawless in an April 1 statement.
"Perth and Canberra values have risen to be 2.9 and 1.2 per cent higher than their previous high point, respectively. Compared with the other major capitals, Brisbane dwelling values have recorded a much softer performance despite a lift in buyer numbers and the strong yield scenario."
Much of this growth, as noted by Mr Lawless, has occurred since June last year. While the beginning of the recovery period has been pegged as June 2012, dwelling values only grew by 2.9 per cent over the first 12 months. However, since mid-2013 these values have jumped by close to 13 per cent.
Following the reduction of the official cash rate down to the historically low 2.5 per cent in August last year, there have been increasing degrees of confidence seen in the market. As housing approvals and home lending commitments increase, the nation is slowly returning to strength.