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Investment opportunities as Home Value Index highlights opportunities

On Oct 02 2013
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  • News

Owners of investment property in New South Wales or Victoria could be extremely happy to hear that ...

Owners of investment property in New South Wales or Victoria could be extremely happy to hear that the value of their capital city properties could have increased during September, giving them the opportunity to sell their property and secure a fantastic return on their investments.

Detailed in the release of the September RP Data-Rismark Home Value Index, Australia's two biggest real estate markets - Sydney and Melbourne - both experienced a growth in value.

"Sydney home values were 2.5 per cent higher over the month and are up 5.2 per cent over the September quarter while Melbourne values have seen a similar 2.4 per cent month-on-month gain and a 5.0 per cent quarterly lift," said RP Data Research Director and Analyst Tim Lawless in an October 1 statement.

"We haven't seen market conditions this strong since April 2009 for Sydney and May 2010 for

Sydney's property market has grown 8 per cent in value since this time last year, while Melbourne has increased by a relatively large 5.4 per cent.

Furthermore, these two rapidly expanding markets were also host to the largest median house prices. Sydney ruled the roost with an average value of $588,000, with Melbourne coming in at a close second place and resting at a comfortable median price of $525,000.

There has also been an increase in the number of investors in the two cities, with the capital gains market favouring detached housing.

Not only has the number of investor related mortgage demands increased by 36 per cent of the market, but the value of detached housing across all capital cities has also grown by 5.7 per cent, compared to the 4.4 per cent growth experienced by units.

"With houses much more expensive than units, affordability constraints are mounting for detached homes. Additionally gross rental yields are generally higher for units compared with houses," said Mr Lawless in the October 1 statement.

"I would have expected a stronger performance from unit markets considering these factors and the fact that investors, who have become more yield focussed, are so active in the market."

This could be great news for anyone interested buying residential real estate as an investment property, aiding market research and highlighting a potentially under-tapped source of real estate wealth.

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