Sydney Still Surging
The latest stats from Residex confirm what we expected to see, with Sydney dwelling prices rising strongly.
Sydney house prices are up by 17.2 percent over the past year and 3.9 percent over the last quarter on the Residex indices.
Apartment prices in Sydney have increased by 13.8 percent over the past year and 2.5 percent over the last quarter.
Sydney Rents Rise
It is quite clear from these numbers that there is no "oversupply" issue in Sydney with rents soaring.
Sydney house rents roared 10.3 percent higher, while unit rents in aggregate were up by another 5.94 percent.
Capital growth has generally been considerably weaker elsewhere and generally poor in most regional areas according to the Residex figures given record low interest rates.
Brisbane to Outperform in 2015
Residex sees Brisbane as an outperformer through 2015 and beyondL
"The models are indicating that Brisbane is likely to be the standout performer in growth terms when compared to other cities. Equally, the models are indicating that the rates of growth are likely to be quite moderate when compared to past growth cycles.
Our chart packs are in agreement with these conclusions. After a rough few years for Queensland, housing finance is steadily building both for owner-occupiers and from investors suggesting price growth ahead in certain suburbs.
However, there are two significant caveats:
Firstly, unemployment rates are rising in many areas of regional Queensland. We will cover this in a little more detail in the next blog post, but we would be much more inclined towards a Brisbane investment than a cheaper regional option.
Secondly, asset selection is key since generic price growth will be weaker than that seen in cycles past. Off-the-plan apartments in larger developments may not be a great choice, for example. Investors need to do better than that and understand the market at a closer micro level.
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