Rising property values highlight investment opportunity

By the resi financial blog team, 25 November 2013

Rising property values highlight investment opportunity

Property investment is fast becoming a great way for Australians to supplement their income and help to build a nestegg of wealth for their future - whether this be retirement, a holiday, or a new car.

There are a number of options available to smart buyers, and the latest RP Data-Rismark International Home Values report for October has highlighted potential investment opportunities in some of the nation's capital cities, namely Sydney and Melbourne.

The latest index has highlighted the rapid growth of property values in these capital cities. With values expected to continue climbing, securing property in these cities now could be a great way to fill your property portfolio with great real estate, set for continued capital gains growth in the future.

For example, capital city housing values rose by 1.3 per cent across the nation during October. Furthermore, combined values have increased by 7.9 per cent this year alone, equalling the fastest growing index rate in three years.

This growth has been spurred on by property in Sydney and Melbourne, both of which have experienced explosive growth in the last 12 months - with Sydney's dwelling values increasing by 11.6 per cent, and Melbourne's growing by. 7.8 per cent.

Senior Analyst for RP Data, Cameron Kusher, said it was the growth in these two cities which aided the overall growth of the nation's capital cities dwelling values.

"Sydney home values increased by 2.4 per cent in October and increased by 5.5 per cent over the past three months while in Melbourne, home values increased by 1.2 per cent in October and recorded an increase of 3.8 per cent over the past three months," said Mr Kusher in a November 1 statement.

"For the first 10 months of this year, Sydney and Melbourne house values have performed very strongly achieving growth of 13.4 per cent and 8.7 per cent, respectively."

He went on to say Sydney's fantastic and rapid growth was in response to the low mortgage interest rates, with the official cash rate dropping to the historically low level of 2.5 per cent.

Capital city home sales during August 2013 were 20.1 per cent higher than the previous year. Furthermore, the number of capital city dwellings on the market for sale decreased by 12 per cent over the last year.

This could be great for anyone interested in taking out an investment loan in the near future, with the city expected to undergo a population boom in the near future. Securing property and establishing yourself in the market is the key to establishing a profitable, viable investment portfolio.

Categories: Home Loans, Property Investment