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Capital city dwelling values increase across the nation

On Feb 04 2014
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  • News

The latest RP Data-Rismark Home Value Index has illustrated an increase in capital city property ...

The latest RP Data-Rismark Home Value Index has illustrated an increase in capital city property values over January, after figures grew by 1.2 per cent over the first month of 2014.

This could be great for anyone considering selling a house in a capital city in Australia in the near future.

Furthermore, dwelling values across the capital cities increased by 2.7 per cent over the three months ending January, and by 13.2 per cent since the beginning of the current growth period, which began back in June 2012.

Values are also 4.8 per cent higher than the last peak of October 2010. Most of this growth is concentrated on Sydney and Melbourne, which are both areas that have seen significant rises in values in the face of an increasing population.

RP Data Research Director Tim Lawless said Sydney and Melbourne grew by 13.4 per cent and 11.9 per cent over the last 12 months ending 2014, which could be great news for the real estate in the future.

"Together with the higher than expected inflation reading and a lower Aussie dollar, the sustained growth in dwelling values is another factor the RBA is likely to consider when deliberating on any movement in the cash rate," said Mr Lawless in a February 3 statement.

Chief Executive Officer for Rismark Ben Skilbeck said strong population growth and an increasing consumer sentiment towards property means these housing demands could be good for those looking to sell.

"Growth in outstanding housing borrowings has increased meaningfully from its lows. Most noticeable is investor borrowing which for the calendar year 2013 grew by 7 per cent compared to 3 per cent in 2011," said Mr Skilbeck in a February 3 statement.

However, rental yields haven't experienced the same rate of growth in Sydney and Melbourne, which have recorded rates below all the other cities for both homes and units.

"With gross yields low in Melbourne, and not a lot better in Sydney, together with the fact that both these markets are well advanced in their growth cycle, it would suggest that investment fundamentals in these markets are waning," said Mr Lawless.

"It is my view that investors will start seeking out the higher yields of Brisbane where the market is also far earlier in the growth cycle."

This could present Queensland as a potential investment option for the future development of property portfolios across the nation.

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