Property market update: Perth, May 2022
Perth continued to outperform its bigger capital counterparts in May, as the city closed up the autumn season with a sol...
Solid growth across major East Coast markets and a national property turnaround have been tipped by a prominent real estate professional.
John McGrath, CEO at McGrath Estate Agents, said there is an uptick in demand and sales in capital cities including Sydney and Brisbane on the back of improving consumer sentiment and interest rate cuts.
One indicator of an improving market was the rise of median house and apartment prices. According to RP Data, Sydney and Brisbane house prices gained 3.4 per cent and 2.2 per cent respectively, while apartments also recorded 3.7 per cent and 3.2 per cent growth in the year to January.
“People are sensing that the bottom has passed and interest rates are too good to ignore. There’s even new activity at the upper end, which has been stagnant for several years,” Mr McGrath said.
“At this stage, I’m tipping a solid five per cent to 10 per cent growth rate across the major east coast markets this year.”
Positive Real Estate’s CEO, Sam Saggers, told Smart Property Investment that investors who want a good combination of rental return and capital gains may want to consider Western Sydney.
“Sydney’s got some fantastic rent, particularly if you head west. It’s quite common that you can get a 6.5 per cent rental return,” Mr Saggers said.
“Right now, we’re still seeing rising rents, and at some point those rents will stop rising, and that will be replaced by capital growth.”
The rise of home loan applications, according to Mr McGrath, also signals an improving market.
Australian Financial Group, Australia’s largest mortgage broker, processed 24 per cent more home loan applications this January compared to the same month last year.
Expecting a market turnaround this year, Mr McGrath said that those who get in first would reap the benefits as they “ride the wave of price growth from the bottom.”
“As prices continue to rise, we’ll see a surge of confidence and a ‘fear of missing out’, which will stimulate continued investment over the next three- to five-year cycle.”