Property market update: Melbourne, September 2021
Melbourne’s property market kept the ball rolling in September as the city’s dwelling values rose once more during t...
Australian property values have finished the year with a soft landing following the RBA’s hard stance on interest rates, but the big question now is what’s on the cards for 2011?
According to RP Data and Rismark’s final Hedonic Home Value Index for 2010, the Australian capital city value index declined 0.2 per cent in November while the ‘rest of state’ value fell 0.1 per cent.
Over the 12 months to November, capital city values finished up 5.2 per cent higher while the rest of state values ended the year up just 2.4 per cent.
According to RP Data and Rismark, Australian capital city home values are now lower than the levels they reached in March 2010. In other words, there has not been any growth since the first quarter of the year.
The key drivers of this soft landing have of course been the actions of the RBA and the banks which have lifted the headline variable mortgage rate from 6.3 to 7.8 per cent between November 2009 and November 2010.
But just where is the property market set to go from here? The forecasts are certainly mixed, with some pundits expecting growth to be slow, others expecting the market to heat up mid-year and then of course there are the few doom-sayers who warn of a property bubble waiting to burst.
Well, according to RP Data and Rismark forecasts, the outlook is relatively weak, but by no means bleak.
“Assuming, heroically, that there are no more increases in the cost of mortgage debt, we would forecast capital city dwelling price growth of four to six per cent,” Rismark managing director Christopher Joye says.
However, with further rate rises still the broad consensus, Mr Joye says this outcome is unlikely.
“We believe that there is a risk of at least three cash rate increases in 2011. In this event, our central case is that there will be little-to-no nominal dwelling price growth over 2011, with a chance of small nominal declines.”
The likelihood of substantial national house price falls is remote, he says.