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RP Data: Peak growth phase passed

Date Posted: Jun, 2014

By Rich Harvey, CEO, propertybuyer.com.au

Signs are pointing to the Australian real estate market passing its peak growth phase, according to RP Data.

In a recent report, RP Data Research Director Tim Lawless outlined how investment activity has surpassed dwelling value growth. This is clear to see in figures released by the Australian Bureau of Statistics (ABS).

The ABS reported that during April, investment finance commitments were at a record high, rising 2.3 per cent month-over-month and 29.8 per cent year-over-year. In dollar value, investors were responsible for $11 billion worth of housing finance, or 47.8 per cent of all housing finance when refinances were excluded.

However, this trend may be about to change.

"Compared with this time last year, investors may now find it harder to secure a property with changes to solid investment fundamentals, particularly in the cities where capital gains have been significant and yields are low," Mr Lawless said.

 "Since values reached their recent trough in May 2012, home values increased by 16.1 per cent to April 2014 compared to a 59.2 per cent rise in the value of investment lending."

This news is especially important for people considering investment property in Sydney, as the New South Wales capital city is one of the two regions currently seeing the highest levels of investment activity, according to RP Data.

"The value of diligent research and a carefully considered purchase decision is all the more important when values aren't rising as fast," Mr Lawless said.

This is all the more reason for potential investors to work with an experienced buyers agent who can help them find a property that holds the potential for profit in a shifting investment atmosphere.

From specific neighbourhood knowledge to advocacy at auctions, selecting the right buyers agent just got more important for Sydney investors.