Australia Property

[Boon]

Australia's new five speed property market
03-Jan-2017
by Elizabeth Knight

So remember how 2016 was meant to be the year the housing bubble started to seriously deflate? Well in the major city markets of Sydney and Melbourne little oxygen escaped with dwelling values rising more than 15 per cent and more than 13 per cent respectively.

The love affair with residential property doesn't appear to be over yet.

The yearly gains were boosted by a surge in prices over December after more modest gains in November - an outcome that few had anticipated.

With capital growth of still more than 10 per cent for 2016 calendar across the five biggest capital cities combined it's easy to see why investors demand for residential property remained strong - despite attempts by regulators to limit finance to cool demand and by banks to increase the cost of investor borrowing.

Factoring in gross rental yields and capital gains, CoreLogic calculates that housing as an asset class, earned a total annual return of 14.7 per cent based on the combined capital cities index results.

These returns would have been significantly higher for Sydney (19.2) and Melbourne (17.1). Putting this into perspective the average balanced superannuation fund earned around 7.2 per cent over the same period and the share market was up 7 per cent.

Five-speed market

The figures out paid to the Reserve Bank argument that the property market was experiencing a solid easing over the year and that its interest rate cuts it made during the year would not boost demand for housing......................................................

http://www.smh.com.au/business/the-econo...tl4y0.html
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