For decades real estate not only delivered security and comfort for Australian families – but also a cast-iron vehicle for wealth building. It was seemingly immune from the ups and downs experienced by other types of investment.
But then came the recent downturn, with falling house prices shaking our longstanding faith in bricks and mortar.
In recent months green shoots have started to appear, at least on the eastern seaboard. In August 2019 Australian capital city house prices rose 1% after a 10.2% decline over the previous 22 months. This was the second rise in a row and the strongest since April 2017.
Sydney and Melbourne house prices rose 1.6% and 1.4% respectively—the third gain in a row for both cities. While auction clearance across capital cities increased above the 70% mark. Prices also rose in Brisbane (+0.2%), Hobart (+0.5%) and Canberra (+0.8%).
The picture wasn’t so rosy in other parts of Australia, with house prices falling in Adelaide (-0.2%), Perth (-0.5%) and Darwin (-1.2%). This left Perth prices down 20.6% and Darwin prices down 30.7% from their 2014 high. And overall house prices across Australia were still down 5.9% from 12 months earlier.
Come the spring selling season and the recovery appears to be gathering momentum, with house prices up 0.9% in September 2019—the biggest monthly gain since March 2017.
And there appear to be plenty of positive signs for home buyers and investors, including:
So is this a good time to jump back in to the property market?
Like any type of investment, it’s difficult to second guess house price and interest rate fluctuations. You could be better off focusing on factors within your control, like your savings plan, mortgage repayments and overall investment strategy.
So whatever your personal situation—and whatever happens with house prices and interest rates—you’ll be in the best position to reach your goals.
Source: AMP, 2019