Business News

Sydney, Melbourne lead way for residential property

Property investment specialist Future Estate’s August residential property update has indicated Sydney and Melbourne are the two cities providing the strongest capital gains.

Quoting statistics from research house RP Data, Future Estate said Sydney and Melbourne dwelling values rose by 2 per cent and 1.8 per cent respectively in the three months ending July 2014.

The data also showed Canberra experienced a lift in residential property capital values of 2.1 per cent for the same period.

At the same time, Adelaide and Hobart lagged behind their counterparts, with both producing capital losses of 2.6 per cent and 1.2 per cent respectively.

Future Estate attributed Sydney’s strong result to a combination of a lack of supply in the market and an increase in demand propelled by an environment of continuing low interest rates.

“It appears the panic surrounding the market a few months ago with respect to the ‘bubble hype’ has eased, and volumes are flattening, which is also due to adjustments in seasonal market conditions as we approach the warmer months of the year where we tend to experience increased stock on the market and higher auction clearance rate results,” it said.

Melbourne was also experiencing strong investment levels because of low interest rates and the property investment specialist said it expected further growth in the city’s residential housing market.

“Melbourne’s middle/outer suburbs are still the best performance for long-term capital growth, particularly the north-east parts of Melbourne, such as Coburg, Thornbury and Fitzroy North, as well as Blackburn, Burwood and Manningham,” it said.

While capital gains were healthy, growth in rental yields for August lagged.

“Melbourne yields the lowest of any capital city at 3.4 per cent, followed by Sydney at 3.9 per cent gross. Despite these results, the total returns on housing have been strong thanks to the level of capital gains,” Future Estate said.

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital