Great Aussie dream alive and lively
Over the first 11 months, home values rose by 11.3 per cent after their modest 3.8 per cent peak-to-trough falls in 2008.
The data, compiled by property RP Data and Riskmark International, found the best-performing capital city was Darwin with values up 17.9 per cent during the 11 months.
Adelaide was the worst, recording just a 5.7 per cent increase.
Christopher Joye, managing director of Rismark International, said the figures indicated the Australian market was less sensitive to interest rate rises and the removal of the government stimulus than previously thought.
“The story here is we saw quite spectacular growth in contrast to the quite pessimistic predictions,” he said. “The key driver of Australian housing demand in the latter half of the year appears to have been upgraders and investors. We expect this trend to continue in 2010.”
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Of the rental markets, Darwin came out on top again with gross rental yield of 5.7 per cent for houses and 6 per cent for units.
Melbourne was the worst with gross rental yields of 3.7 per cent for houses and 4.4 per cent for units.
SQM Research managing director and property expert Louis Christopher said he believed renters were in for a rocky year with rents set to continue rising.
“Rents continued to rise in 2009, particularly in the medium to affordable end of the market, and I expect that to continue into 2010,” he said. “I wouldn’t be surprised if rental growth tops 7 per cent.”
Mr Christopher also said the phasing out of the boost to the first-home buyer grant, to take effect from today, would “seriously hurt” the property market. “There will be an impact on the market. Because of the wind back to the FHOG, it will be a considerable factor to the slower house price growth in 2010,” he said.
“Holiday homes and prestige property will see a major return and will be the best performers. The affordable end will still record growth but not as robust because of the scale back.
“Nationwide we are going to see 4-6 per cent house price growth as an average for 2010.”
Real Estate Institute of Australia president David Airey said that despite the prospect of further interest rate rises this year, he was optimistic buyers would continue to return to the market.
“Australia has a passion for real estate. Although we’ve been through a huge storm following the financial meltdown, many think we got out of that fairly easily,” he said.
“The buyers are there and they are looking out for property.”