I came across an exceptional article by John Edwards the Founder of Residex today which I thought was worth sharing with you.
John’s article looked at the performance of the Australian real estate market in 2014.
It also made predictions for 2015 and beyond.
According to Residex data ‘2014 has been a better year for Australia’s housing and unit market, with Australia wide house growth being some 2.64% better than last year’.
Table 1, looks at the growth rates for Australia’s capital cities for the 12 months up to the end of November 2014.
As you can see the Brisbane (7.12%), Melbourne (9.38%), Sydney (17.15%) and NSW country (7.38%) housing markets all performed well.
The Brisbane (5.41%), Queensland country (5.44%), Sydney (13.74%) and NSW country (6.71%) unit markets also performed well.
“It’s important to note that data evidences our markets have passed their peak period of growth for this cycle” John Edwards.
Table 1. Monthly Summary
What’s on the cards for the Australian property market in 2015?
In Table 2 John provides Residex’s capital growth predictions for the next 5 – 8 years across Australia’s major capital cities.
As you can see the Brisbane (3% – 5% p.a.) and Sydney (4% – 5% p.a.) are predicted to be the top performers.
Table 2: Capital Growth Predictions
According to Residex the market will slow, and produce moderate growth for the next two – three years, and then move forward again in mid to late 2017. As always certain markets and areas within Australia’s capital cities will underperform and outperform the averages.
Residex’s models are indicating the Brisbane real estate market to be the top performer in 2015. ‘Although growth will be moderate when compared to past growth cycles’ according to John.
Why is the Brisbane real estate market predicted to perform in 2015?
- It is one of the most affordable cities in Australia for housing, when compared with other major cities (see Table 3);
- The median cost of a property is now lower than all other capital cities (except Adelaide and Hobart). On a historical basis this is unusual. In the past, both Darwin and Perth have been less expensive than Brisbane.
- Rental yields in Brisbane are now more attractive than in other major capital cities on the east coast.
- There are now situations where rental yields of 6%+ can be found in the Brisbane market.
For more information please take a look at the full article by Residex here.
Table 3: Affordability
Please note: All of the data and information provided in this article was made possible by the hard work of John Edwards and his team at Residex team. Pumped On Property are grateful that industry leaders like Residex exist.
Warning: Pumped On Property are not investment advisers. This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. All readers should seek independent and qualified investment advice before purchasing a property.