Property Growth

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Almost everyday there's a new contradictory report backed up with data and opinion on Sydney's anticipated price direction. Who to believe? The spoiler or spruiker? What to do with your life?
The likelihood is no-one really knows, especially given the negative gearing doubt, but owner occupiers should thoughtfully proceed with caution in this low interest rate environment, while investors will continue t weight up their chase for yield without emotion.
Estate agent John McGrath recently advised that at the end of housing booms, buyers can get a bit obsessed with timing.
"They often hold off believing (or rather, hoping) prices will fall and this delays their purchase," he said, suggesting it comes at a potential cost.
He says after being in the game for 32 years that buying the best property you can afford, when you can afford it; and holding it for the long term is always the best play.
"Believe me, time in the market is much more important than timing the market when you buy," he suggested.
True, but overpay and then sell during the dips Sydney has periodically recorded in recent years, and it's a costly loss. 
Recently $2.62 million secured a Woollahra terrace that sold at $2.7 million in 2007, which provides delicious conversation at the home buyers' house warming.
At Rose Bay, a Harry Seidler-designed penthouse sold last week for around the same $5.6 million price bought it for a decade ago.
The 2/20 Ian Street, Rose Bay apartment sold on Friday ahead of a planned auction through 1st City agents Alexander Gold and Rod Fox.
 
There are plenty of near backward prices undermining another adage that Sydney property doubles every seven years.
The more recent housing cycles have necessarily seen this adage adapted to every 10 years.
But I saw a Macquarie Street, Sydney CBD apartment sell recently at $2 million, having been bought off the plan in 1999 at $1.01 million.
Nationally only 32 percent of homes are currently reselling at double or more than their purchase price, typically owned for 17 years.
Cameron Kusher at CoreLogic RP Data did some research on the decade to January 2016, finding home values across the combined capital cities increased by 72 percent which suggests values aren't doubling over the decade.
If we look at the split between houses and units, house values are 73 percent higher compared to 64 percent increase in unit values.
Although combined capital city home values haven’t doubled over the past decade, the previous decade was quite a different story.
Between January 1996 and January 2006 combined capital city home values increased by 151 percent with house values up 159 percent and unit values 110 percent higher. B
Taking a look at value growth across individual capital cities shows a diversity in results as Melbourne was the only capital city housing market where home values doubled over the past decade.
Home values in Sydney and Darwin have each recorded increases of more than 75% over the past decade.
Brisbane, Adelaide, Perth, Hobart and Canberra increased by less than 50%. 
But over the 10 years to January 2006, home values more than doubled across every capital.
It all suggests the days of rapid value rises are behind us, or or at least for most of us.
This article was first published in the Saturday Daily Telegraph.
 
 
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It's taking longer to double your property price

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Australia’s $6.4 trillion property market may have slowed down, but conveyancing professionals are optimistic that 2016 will be a strong year for the residential sector, according to a recent study.
A high proportion — 82 percent — of legal and conveyancing professionals believe Australia’s home values will stay constant or increase over the next year, offering a sign of better things to come for those looking to invest, says new research by GlobalX Legal Solutions.
GlobalX Legal Solutions chief executive Peter Maloney said while the property market had experienced a temporary stunt in growth over the past few months, the survey results show the industry has an optimistic outlook.
“Despite the last quarter reporting slower than average growth, our research found one in three conveyancers believe market valuations will increase by more than 5 per cent in the next 12 months,” he said.
“The nature of the industry is that prices fluctuate up and down, moving in peaks and troughs. While the annual rate of capital gain has been trending lower since July 2015, residential house prices are up 7.5 per cent from 12 months ago.”
“On the volume side of the property equation, settlement has taken place for nearly all of last year’s spring property season. We are through the lull of Christmas and the New Year. Volume of transactions in February is off to a flying start; with many sellers going to market before the earlier than usual Easter break.”
The view is supported by CoreLogic RP Data’s February Home Value Index results, which showed Australia’s property market is looking up, despite investors facing slower property growth, higher home loan rates, and tighter lending rules than previous years.
“Investors face different buying conditions this year due in part to recent industry changes, but with the market forecast to gradually increase, home valuations are still set to rise, only at a slower pace than we’ve recently witnessed,” Maloney said.
“With Sydney’s home values increasing at their slowest annual pace since September 2013, other capital cities like Melbourne and Brisbane are experiencing moderate growth,” he said.
Maloney said the start of the year tends to be a relatively quiet month across the housing market, but as the sector moves out of its seasonally slow period, they were likely to see new trends emerge.
“Australia’s housing market is habitually very resilient, so we will be watching closely over the coming months to see what regions and developments evolve within the market,” he said.
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