news

Hot markets beginning to cool

Despite continued strong results in the major capital cities, a leading analyst has warned capital growth is on the brink of slowing.

The latest information from RP Data shows capital city dwelling values rose by 1.1 per cent over the three months to July.

Sydney, Melbourne and Canberra lead the charge, with gains of 2.0 per cent, 1.8 per cent and 2.1 per cent respectively.

However, RP Data research director Tim Lawless said peak conditions had passed in Sydney and Melbourne and growth trends were starting to ease.

In the six months to July, dwelling values rose by 3.7 per cent across all the capital cities.

In comparison, growth hit a high of 7.2 per cent in the six months to November 2013.

Mr Lawless said investors could expect capital growth to continue but the rate of acceleration was beginning to taper off.

“With interest rates remaining low and fixed rates seeing further downwards pressure, we are expecting that capital gains will continue into the foreseeable future,” he said.

“What is likely though is that the rate of capital gain will continue to reduce, particularly in those cities where affordability constraints are the most significant and rental yields are the lowest.”

In particular, he warned low-yield, highly priced environments in Sydney and Melbourne would discourage buyers.

In his view, the coming months will demonstrate the strength of demand in these cities.

“The real litmus test for the market will be how much buyer demand is apparent during the Spring selling season,” he said.

“Winter has seen above average auction clearance rates however, as listings inevitably rise sharply over the coming months this will create the greatest test for the Sydney and Melbourne housing markets in terms of how strong value growth will be.”

Thank you.

Your enquiry has been sent to a local Aussie Mortgage Broker.

We will be in contact with you shortly.
Opps.

error occurred.
Unfortunately Aussie cannot attend to your home loan related enquiry at this stage as you must be a citizen or permanent resident.
Do you need help finding the right loan for your investment?
What Aussie do for you:
  • Give expert mortgage advice to help you find great investment loan deals
  • Help you maximise return by lowering financing costs
  • Save you time and effort by helping with the paperwork
First name
Last name
Location
Mobile Number
Are you an Australian Resident?
promoted stories

Top Suburbs

Highest annual price growth - click a suburb below to view full profile data:
1.
BLUE BAY 49.18%
2.
PAMBULA 43.5%
3.
BERKELEY VALE 42.74%
4.
POINT PIPER 40.52%
5.
NORTH TURRAMURRA 38.12%
Hot markets beginning to cool
SPI logo