Year opens on a high for Australian property market

2010 is in good stead 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, providing a solid platform for 2010.

Harcourts International’s Managing Director, Mike Green said 2009 statistics indicated 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,” Mr Green said.

According to Mr Green, the rise in house values strongly 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, with December sales figures for Harcourts, the strongest in over 3 years, suggesting that growth continued right throughout the years”, he said.

“Further evidence of a healthy marketplace for property investors is the fact that affordability for renters is likely to decrease over the coming year”.

“During the course of 2009, vacancy rates slipped a little due to the boost of the First Home Owners Grant and low interest rates.

“Indications however all currently point to an increase in rental prices this year thanks to a growing population and a shortage of new developments,” he said.

Mr Green said 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.