Good Time to Buy Home or Investment
There has been a strong rebound with Australian house prices regaining previous losses with a rise of 1.7 per cent in June. According to RP Data, house prices have now risen 2.7 per cent since the start of 2013 and will record a rise of a little more than 3.5 per cent in 2012-13 financial year as a whole. Over the past financial year house prices rose in each capital city in Australia. Darwin posted the strongest gains, with house prices up 6.1 per cent, followed closely by Perth where home prices grew by 6 per cent. Sydney came in third place with a rise of 5.6 per cent.
According to WBP there were 600 to 800 residential auctions in Melbourne in the last weeks of financial year achieving clearance rates of 73 to 86 per cent. The trend continued into the new financial year with almost twice less auctions due to winter period. However, even the latest two weekends of July showed still clearance rates between 70-75 per cent with Melbourne's South-Eastern suburbs standing out at a staggering 89 per cent compared to only 42 per cent for the same weekend last year. Mirroring this strong performance were the northern suburbs with a clearance rate of 83 per cent, compared with 54 per cent for the same weekend last year. It is a very different marketplace now than this time last year.
The strong clearance rates are a result of growing interest from investors and home buyers taking advantage of positive lending conditions. The key factor supporting house prices is the current reduced level of interest rates. There is also a strong possibility that the Reserve Bank will reduce interest rates further between now and end of the year. This makes some economists to believe that there could be a serious surge in house prices due to extremely attractive interest rates, fall of the Aussie dollar and ongoing household income growth.