Year opens on a high for Australian property market

2010 is looking up thanks to the 2009 property market year-end figures, one of the most challenging years in the history of the Australian economy. All Australian capital cities recorded strong annual house price increases, which gives us a solid platform for the year ahead.

Last year’s stats showed that Darwin recorded the highest house price increase of approximately 12.3 per cent from the previous year. Melbourne and Canberra followed, with solid price rises of 8.4 per cent and 7.8 per cent during the same period.

Sydney also recorded a house price increase of 5.9 per cent up from the previous year (2008), and prices continued to rise in Brisbane (5.6 per cent), Hobart (5.4 per cent), Perth (4.4per cent) and Adelaide (3.7 per cent) –  averaging just 2.2 per cent below the March 2008 peak.

The rise in house values indicates a recovering economy, and is due mainly to a shortage of housing supply and a growing population, government incentives, and the low interest rate.

Not only did we see rising house prices in 2009, we also saw growing volumes right across the market. Harcourts December sales figures were the strongest in more than three years, his suggesting the growth has been going on throughout the years.

During 2009, vacancy rates slipped a little due to the boost of the First Home Owners Grant and low interest rates. So the marketplace is healthy for property investors because affordability for renters is likely to decrease over the coming year.

Industry figures have predicted an increase in rental prices this year thanks to a growing population and a shortage of new developments. Rental hikes across Australia are likely to rise by 5.8 per cent each year for the next three years.

Based on the steady improvement to the market during 2009, this year should see continued growth. This means great news for home owners and property investors alike. So let’s get stuck into 2010 – I think it’s going to be a great year!