Market Finance News: Capital city values continue to increase during January

By the resi financial blog team, 05 February 2014

Capital city values up in January 2014

There are a number of different things to consider before purchasing property in Australia. One of the first things to look into is the potential for future growth, with the latest RP Data - Rismark Home Value Index report highlighting the strong momentum in the nation's real estate market at the moment.

This could provide a great investment opportunity for smart buyers across the country, with this growth expected to continue well into the future during 2014.

The combined capital city value increase during January was 1.2 per cent. This was in addition to 2.7 per cent growth over the three-month period ending in January. Property values in Australia's capital cities are now 4.8 per cent higher than their previous peak back in October 2010.

RP Data Research Director Tim Lawless highlighted the immense growth of the Sydney and Melbourne markets, which continue to post rising value figures in the face of population growth.

"Sydney and Melbourne were the clear drivers for capital gains over the past year, with values up 13.4 per cent and 11.9 per cent respectively over the twelve months ending January 2014," said Mr Lawless in a February 3 statement.

He went on to say that this continued growth, coupled with the higher than expected inflation reading for the Australian dollar and the sustained growth of property values with low interest rates, is likely to be a major factor considered by the Reserve Bank of Australia (RBA) during their first cash rate decision of 2014.

Rismark's Chief Executive Officer Ben Skilbeck affirmed this point, stating that strong population growth will continue the appetite for real estate in the near future - which in turn will help to keep house prices rising.

"Growth in outstanding housing borrowings has increased meaningfully from its lows. Most noticeable is investor borrowing which for the calendar year 2013 grew by 7 per cent compared to 3 per cent in 2011," said Mr Skilbeck in a February 3 statement.

Categories: Home Loans, Property Investment