East Coast property prices could rise 10% in 2013: John McGrath

Alistair WalshDecember 7, 2020

Property prices on the east coast are expected to rise by between 5% and 10% over 2013 as part of an overall turnaround in the property market, according to John McGrath.

Strengthening economic conditions overseas, falling mortgage rates, improving business and consumer confidence, low unemployment, low inflation and growing rental yields all bode well for the property market in Australia, says McGrath, CEO of McGrath Estate Agents, in his Autumn report.

He says east coast property prices are improving with certain areas receiving a noticeable uptick and people are sensing that the bottom of the market has been reached.

Most notable for the east coast region is a rise in activity at the upper end of the market, which has been “stagnant for several years”.

He says Sydney is the best performing market with positive signs also being seen in Brisbane.

Across the east coast, McGrath is predicting 5% to 10% growth in all major markets.

“In a recovery, confidence is key. The GFC had an impact on Australians’ confidence and while the property market has presented fantastic opportunities for some time, many have been slow to respond, preferring to wait until the market has ‘found its bottom’,” McGrath writes.

“This now appears to be changing.”

He says the US and Europe appear to have stabilised while the ASX All Ordinaries Index increasing 25% since June will give a boost to the top end of the market.

McGrath says interest rate cuts have boosted consumer confidence, which he says will provide strength to the lower end of the market.

A Coalition win at the federal election, which looks increasingly likely, will provide further confidence for corporate Australia.

Though there have been talks of the end of the mining boom, McGrath says Australia will continue to reap the rewards for some time, especially as the Chinese economy is set to grow by 8% this year.

He says rising home loan applications are a key indicator of an improving market and notes that mortgage broker AFG, have reported a 24% increase in applications in January while between 35% to 50% of loans in NSW and Queensland are going to investors.

“The investor trifecta of cheap money, rising rents and price growth is bringing them back in droves. Cash and term deposits are far less attractive and there’s continuing strong interest in purchasing via self-managed super funds,” McGrath says.

“This year will be the turnaround year. Those who get in first will reap significant rewards as they ride the wave of price growth from the bottom,” McGrath writes.

“As prices continue to rise, we’ll see a surge of confidence and ‘fear of missing out’, which will stimulate continued investment over the next 3-5 year cycle.”

Alistair Walsh

Deutsche Welle online reporter

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