It’s important to understand what’s driving the Australian economy, especially when you’re a homeowner, hopeful first home buyer or property investors.
The last year has been a steady one for the Australian economy. It hasn’t fired up, but it hasn’t slowed dangerously, which is good news.
NAB lowered its overall growth forecast for FY2015/16 to 3% in March (from 3.2%). Why? Weaker business investment, a slightly higher unemployment rate, and weak domestic consumption mean slower overall growth.
House prices and property investors
With so much data available on how national and local housing markets are faring, it’s not hard to stay informed on how property values are developing.
According to CoreLogic RP Data, Capital city dwelling values rose by 0.3% in February, that brings overall growth to 8.3% in the 12 months to February 2015.
Tim Lawless, CoreLogic RP Data’s head of research, says we might not see the lower interest rate environment stimulate the housing market as much as in the past. “Weaker jobs growth, higher unemployment, declining affordability, low rental yields and political uncertainty are all factors that could dent consumer confidence,” he points out.
Sydney and Melbourne are still the strongest markets across Australia for property investors, with yearly growth up 13.7% and 7.4% respectively by the end of February 2015.
The $400,000-$600,000 price bracket accounts for the largest proportion of both house and unit sales in 2014.
Hobart remains the most affordable capital city for housing, as the only capital with over 5% of house sales below $200,000. In contrast, almost one-third (31.6%) of all house sales were over $1 million.
Housing investment and building approvals continue to remain steadily strong, despite attempts to tighten foreign investment rules. NAB expects to see similar or stronger growth in dwelling investment over the next year.
As your mortgage broker we’re always happy to point you towards the latest research and data on the economy and housing markets for property investors, home owners or first home buyers, or if you are interested in obtaining an updated valuation on your property, touch base today.