This time last year, there was doom and gloom in many property markets throughout Australia. Now, Sydney and Melbourne are leading a rebound that’s going from strength to strength.
The latest CoreLogic statistics show that Sydney’s median property price surged 10.9% over the year to February, while Melbourne’s jumped 10.7%.
There were also gains of 5.0% for Hobart, 4.1% for Canberra, 1.9% for Brisbane and 0.4% for Adelaide.
The other two capitals went backwards – Darwin by 7.8% and Perth by 4.0%.
As a result, five capital cities now have record-high property prices – Melbourne, Brisbane, Adelaide, Hobart and Canberra.
Time will tell what sort of impact the coronavirus will have, but anecdotal evidence suggests that buyers are still active.
Three key events triggered the property revival
All of this would’ve seemed impossible 12 months ago, when prices were falling in Sydney, Melbourne and many other markets, with no end in sight.
So what changed?
Well, there were three key events in 2019 that triggered this revival.
First, Australia’s banking regulator, APRA, told lenders in July that they could ease their lending criteria, after spending the previous four years telling them to tighten. That made it easier for people to qualify for home loans.
Second, the Reserve Bank cut official interest rates in June, July and October, which meant that not only was it easier for people to qualify for home loans, but those loans were now cheaper.
Third, the Coalition won a surprise election victory in May. Until then, many property investors had held off buying, because they feared Labor would win the election and crack down on negative gearing. Scott Morrison’s victory – in combination with the rate cuts and easier borrowing criteria – brought many investors back into the market.
Property prices have grown over the long-term
Thinking about buying? If so, it might be better to take action sooner rather than later, so you can get ahead of any ongoing price rises. Despite the COVID-19 crisis, anecdotal evidence suggests buyers are still active.
It’s also worth remembering that while our eight capital cities experience downturns from time to time, the long-term trend is for price growth, which should give confidence to people who buy quality properties in quality locations.
The latest ABS statistics show median house prices have grown strongly in the past 15 years:
● Melbourne = 127%
● Hobart = 100%
● Darwin = 93%
● Canberra = 91%
● Perth = 85%
● Adelaide = 79%
● Sydney = 77%
● Brisbane = 75%
Looking to buy now so you can get ahead of any price rises? Contact me at firstname.lastname@example.org and let’s organise a quick chat.