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Hi Everyone,

I thought the interview with John Edwards from Residex is worth looking at to get a bit of an overview of the Australian market, and he thinks that Sydney and Melbourne may have peaked for this cycle, However, if we look at the NAB’s view, we can see that they predict quite robust rises for most regions.

I think it is simply common sense to focus on the two states with the most diversified economies, which are Queensland and NSW, when selecting an area for property investment, unless you have no choice due personal reasons which may restrict your selection capability. Too often we see individuals making potentially incorrect strategic decisions based solely on an emotional bias due to wanting to invest in the same location that they live in.

ANZ chief economist Warren Hogan told the Committee of Economic Development of Australia that the “housing market is at the early stages of a solid cyclical upswing” fed by low-interest rates and market shortfalls.

“We expect a 15-20 per cent lift in home prices between 2013 and 2015,” he said with long-awaited rises already underway in Sydney and Melbourne” ANZ one of the country’s biggest banks expects house prices to rise as much as 20 per cent before the end of next year, with lifts predicted to begin soon in parts of Queensland.

NAB modelling indicates that average capital city house prices will rise by around 6% through the year to December 2014 and by 5% in the year to December 2015, which is more bullish than the average survey forecast. House price growth should be supported by continued low-interest rates, improved affordability, population growth, long-standing supply issues and foreign buying activity.

However, unemployment pressures and the economy are likely to put a ceiling on how high house prices will go.

Brisbane (6.4%), Perth (6.3%) and Sydney (6%) lead the way forward in 2014, with much slower growth predicted in Adelaide (2.1%) due to high unemployment and an under-performing state economy. State variance will persist through 2015, with Brisbane (6%) and Sydney (5.1%) out-performing the national average. Modest price growth is also forecast for Perth (4.6%) and Melbourne (3.4%), but Adelaide (2.6%) continues to under-perform.



Dwelling values continue upward trend

All capital cities posted a month-on-month increase in dwelling values in March, with Brisbane the market to watch, new research has revealed.

Dwelling values rose by 2.4% over March, equating to a 3.5% capital gain over Q1 according to the RP Data-Rismark Home Value Index.

Over the past three months, all capital cities apart from Perth posted a rise in dwelling values. Melbourne led the charge, up 5.4% over the quarter, followed by Hobart (up 4.7%) and Sydney (up 4.4%).

Sydney’s housing market has recorded record high dwelling values and is now 15.8% higher than its previous peak, says RP Data research director Tim Lawless. This compares to Melbourne’s growth of 4.7% from its previous peak, Perth’s growth of 2.9% and Canberra’s growth of 1.2%. read more...

Capital city property supply levels tighten 

james- Switzer brokerBy Craig James
Judging by the low supply of stock on capital city housing markets, home prices are likely to remain firm for some time.RP Data arguably has the best information on housing supply, claiming 100 per cent coverage of listings. RP Data says that it “tracks listing numbers nationally via real estate portals and print media as well as sourcing listings data directly from many of the major real estate groups. read more...



By John Edwards
Is the housing bubble a myth or reality? For his views on house prices, John Edwards from Residex joins Broker TV.  Watch it now 

Brisbane inner north

Outstanding price growth for Brisbane’s inner north

Apartments in Brisbane’s inner-northern suburbs have been consistently achieving double-digit annual growth since around 2008, according to a local real estate group.

Director of Position Property Richard Lawrence said information from RP Data shows Albion, Clayfield, Ascot and Hamilton had annual price growth of 16 per cent over the past six years.

“Whether it is owners or investors, these figures represent not only market growth in the region but continued confidence in the inner-north suburbs,” Mr Lawrence said. read more …



By Smart Property Investor Staff Reporter

Friday, 06 February 2015

Two prominent economists have praised the Reserve Bank of Australia’s decision to reduce the cash rate and have predicted at least one more cut to come.

Domain Group senior economist Andrew Wilson said the Reserve Bank had made the right decision to reduce the cash rate from 2.5 per cent to 2.25 per cent.

Dr Wilson also said that another cut is likely, given that the economy received minimal stimulus from the succession of rate cuts between October 2011 and August 2013.


“We haven’t had much action from cutting from 4.75 per cent to 2.5 per cent, so I’m not sure what a 0.25 per cent improvement is going to do,” he told Smart Property Investment's sister publication Real Estate Business.

“Certainly the Reserve Bank had to act – it’s really the only tool in the box that we’ve got left.”


Pricing gaps across product types and capital cities are widening

by Cameron Kusher

30 January 2015

The cost of Sydney housing relative to other capital cities is widening and the cost of buying a house as opposed to a unit is increasing as a record number of units commence construction.

The cost of Sydney housing relative to other capital cities is widening and the cost of buying a house as opposed to a unit is increasing as a record number of units commence construction.

According to median selling prices over the three months to December 2014 published in the CoreLogic RP Data Home Value Index report, the gap between capital city house and unit prices has never been greater. As at December 2014, the capital city median house price was almost 20% higher than the capital city median house price. In dollar value terms, median house prices are $100,000 greater than unit prices. read more...


John McGrath ignites Sydney's "hot forever" inner ring debate

by Jonathan Chancellor


John McGrath has always been passionate about the property prospects of Sydney’s inner ring suburbs. But last week he went a little further, saying suburbs close to the city are becoming so desirable that they will be “hot forever”

But last week he went a little further saying suburbs close to the city are becoming so desirable that they will be "hot forever".

The high profile agent stopped short of declaring inner city property prices were immune from price falls.

But the chief executive of McGrath Estate Agents told Fairfax Media these areas would always be attractive to buyers.

"There is just no end of demand from overseas and local buyers who want to live in those precincts," McGrath said.

read more..





Sydney property bubble to pop when rates rise, says HSBC

Wednesday, 11 Feb 2015   |

James Mitchell



·        A fresh round of cheap credit is further inflating Sydney’s investor-driven property prices.

In a research note released yesterday, HSBC economists Paul Bloxham and Daniel Smith predict strong national housing price growth to continue at seven to eight per cent, driven by record-low mortgage rates.

“We see Sydney prices rising by 9 to 10 per cent in 2015 and expect that, when rates do eventually rise, there is now a high risk that Sydney will see price falls,” the economists said.

“Although we do not see a national housing bubble, we believe that growth in Sydney housing prices is currently running at an unsustainable pace and that any further growth is likely to be met by housing price declines in future years, when interest rates do begin to rise,” they said.

A signal of the growing risk of overinflation in the Sydney market is the high level of investor demand, according to HSBC.

Read more…







Melbourne growth to stand out in 2016: HSBC's Paul Bloxham

Melbourne will see the highest price growth of any capital city next year, HSBC has forecast.

In the latest HSBC Australia Downunder Digest report, HSBC Australia chief economist Paul Bloxham forecasts 4% to 8% price growth in Melbourne for 2016, after 7% to 8% growth in 2015.

Bloxham expects that in 2015, Melbourne and Sydney will "continue to outpace the rest of the nation", noting that from its mid-2012 trough, Melbourne's housing prices have increased by 20%. Read more


Commonwealth Bank posts 8pc half-year profit rise to $4.5b

By business reporter Michael Janda

Updated 11 Feb 2015, 5:49am


PHOTO: The Commonwealth Bank has posted its half-year results. (ABC News: Nic MacBean, file photo)

The Commonwealth Bank has reported an 8 per cent rise in half-year profit to $4.54 billion.

The bank's preferred cash measure of net profit, which adjusts for some accounting items, also rose 8 per cent to $4.62 billion.

CBA said its improved profit came on the back of a 5 per cent increase in revenue, despite subdued conditions in the lending market.

It also said it had lowered its cost to income ratio by 70 basis points to 42.2 per cent, as productivity initiatives continued to contain business expenses.

Read more…






NAB’s View of Residential House Prices – Brisbane & Sydney to outperform

Washington Green Property

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