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Sydney still offers capital growth potential

Date Posted: Jul, 2014

By Rich Harvey, CEO, propertybuyer.com.au

Multiple reports have recently focused on the slowdown in real estate price increases in Australia, and the latest RP Data Rismark Hedonic Home Value Index is no different.

RP Data Research Director Tim Lawless said the trend for price growth is toward sustainability.

“Looking through the monthly movements, the trend in performance is much more important. It shows that the quarterly rate of growth peaked across the Australian housing market in August last year at 4.0 per cent,” he said.

“Since that time the rate of capital gain has generally trended towards a more sustainable level. The slowdown in dwelling value appreciation will be a welcome relief to policy makers and those seeking to buy into the housing market.”

With this news, you could be forgiven for wondering if buying investment property in Sydney still offers the chance for solid capital gains.

On the bright side, a cooling of price growth doesn’t mean a decline.

Mr Lawless went on to say that with interest rates remaining low, it’s unlikely house values will decrease.

Look no further than the value growth activity for June for proof. Figures from RP Data and Rismark show that Sydney property experienced a value increase of 1.7 per cent month-on-month during this time period. Meanwhile, year-over-year, Sydney led the country with growth of 15.4 per cent.

The second highest growth was recorded in Melbourne, which only saw an annual value increase of 9.4 per cent.

Clearance rates are also holding strong, according to Mr Lawless. This goes to show continued demand for housing – great news for investors in Sydney.

If you’re on the hunt for an investment property, whether for capital growth or rental income, work with a professional who has expert knowledge of the area. The right buyers agent will streamline the process and help you secure the property that fits your strategy.