The future is bright for residential

Editorial director of Switzer
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A new report out today by BIS Shrapnel finds that the next three years should see improved prospects for the residential property market, but this growth will be mixed across states and cities.

The Residential Property Prospects, 2013 to 2016 report reveals that NSW will be the star performer over the next three years, with Queensland joining it from 2013/2014.

Growth in Western Australian and the Northern Territory markets will continue in the short term, but may taper off as the resource boom slows. BIS Shrapnel, like other property research groups, attributes the recent growth in the residential market to the record low interest rates.

“Outside of 2009, home loan affordability in all capital cities is at its best level since the first half of the 2000s,” BIS Shrapnel senior manager and study author, Angie Zigomanis, said in a release today.

“As a result, we are seeing some improvement in some residential market indicators. Lending to both owner-occupiers and investors has been trending upwards in the nine months to March 2013. Lending to first home buyers has also been trending upwards outside of declines in New South Wales and Queensland, where changes to first home buyer incentives have created a short term dip in demand.”

The RP Data combined auction clearance rate for seven capital cities shows continued improvement (see graph below) and rose slightly to 68.7 from 66 the previous week.

The APM data also revealed a good result, despite the torrential rain that bothered some capital cities – 77.4% in Sydney and 67.2% in Melbourne (see Table 2 below). That compared with RP Data rates of 72.8% and 71.2% respectively on the weekend.

The updated auction results for the previous weekend, i.e. Saturday 22 June, show similar results i.e. 72.5% in Sydney and 67.8% in Melbourne (see table below).

And the same week last year still lags at less than 55% for Sydney and a slightly better 61.5% for Melbourne.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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