Property Market Information: Growing but slowing in 2015

By the resi financial blog team, 15 January 2015

Property Market Information: Growing but slowing in 2015

The property market across the country has been nothing if not buoyant over the past couple of years. At the end of 2014 we could look back and see that the peak was reached around a quarter way through the year, although the market still performed at an exceptional rate. The latest report from CoreLogic RP Data provides a clear look back over last year and some predictions for the direction of 2015.

According to CoreLogic RP Data's Home Value Index results for December, the rate of capital city value growth was 7.9 per cent for the year. This compares to 9.8 per cent over the 2013 calendar year. The peak of the growth trend, however, was noted in April 2014 as 11.5 per cent for the previous 12 months.

It is important to note that passing the peak in home value increases does not mean prices are decreasing - it simply means that capital gains are slowing down to a more moderate (and sustainable) level.

When it comes to achieving phenomenal annual growth, you may surprised at which capital cities were the star performers. While 2014 was dominated by the usual suspects - Sydney and Melbourne, at 12.4 and 7.6 per cent respectively - the long game is a different story.

Surprisingly, two of the most modest performers in 2014 have increased the most in value over the past decade. Darwin properties, which appreciated at a rate of 1.6 per cent in 2014 have achieved the most growth since 2004 - 7.7 per cent. Perth which achieved a similarly low 2.1 per cent last year hit 6.8 per cent for the last ten years.

The combined capital average is 5 per cent for the last ten years, and 7.9 per cent for 2014, showing that although 2013 and 2014 were bumper years, they are not what should be expected from an average property market.

According to the Home Value Index, the best performing capital city was Perth at 2.8 per cent for the quarter. On the other hand the weakest was Canberra at a negative 3.4 per cent. Canberra is the only city that has had declining values for the month, quarter and year.

Cameron Kusher, senior research analyst for RP Data, predicts that the housing market will continue to grow, but at a reduced rate in 2015. 

"Affordability hurdles in Sydney, and to a lesser extent in Melbourne, are making it increasingly difficult for some buyers to enter the market. Additionally, low rental yields and the likelihood of tougher lending criteria to investment buyers will likely dampen the very active investor segment of the market which may in turn reduce housing demand in 2015," said Mr Kusher.

If you are considering entering the market with a new home loan to take advantage of the sustainable period of growth ahead, talk to a resi loan specialist for some useful information and a great deal on your finance.

Categories: Home Loans