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Hear the latest weekly insights into the property market via podcast by Rich Harvey, CEO and founder of Propertybuyer.

 
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Fri 3 May '24 with Rich Harvey Unpacking the Northern Beaches with Incredible Agents
 
 
Fri 29 Mar '24 with Rich Harvey How to build a $7 Million Property Portfolio from scratch
 
 
Sat 16 Mar '24 with Rich Harvey Why Invest in Melbourne?
 
 
Mon 26 Feb '24 with Rich Harvey Sydney’s Inner West – Hotspots and Outlook for 2024
 
 
Mon 12 Feb '24 with Rich Harvey Decoding Sydney’s North Shore Market – Outlook and Opportunities.
 

 

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Interest rates major factor for property market activity

June 25, 2014 / Written by Rich Harvey

 

By Rich Harvey, CEO, propertybuyer.com.au

Low interest rates have been a huge boon to the country's property market over the past year, and according to BIS Shrapnel, they will continue to be.

The market analyst's Residential Property Prospects 2014 to 2017 report makes the case that limited housing supply and low interest rates will continue to provide a boost to house prices, with the latter also helping to support purchase activity.

"The current standard variable rate of 5.95 per cent is, outside of the [global financial crisis] emergency low interest rates in 2009, the lowest level in over 40 years," said BIS Shrapnel's Angie Zigomanis.

However, these interest rates haven't done much in regards to the first home buyer demographic.

"The low interest rates have had minimal impact on first home buyer demand, which has weakened considerably as state governments have removed incentives for established dwellings in favour of targeted incentives for new dwellings," Mr Zigomanis continued.

"However, this weakness has been more than compensated for by the strength of 'next time buyers' and investors. Population growth has also experienced a surge as net overseas
migration increased from a low of 180,200 in 2010/11 to 244,400 in 2012/13, with the subsequent rise in rental demand also placing pressure on many capital city markets and helping to underpin price growth."

While some industry observers, such as RP Data's Tim Lawless, already feel that price growth has reached its peak in Australia, BIS Shrapnel is of the opinion that all markets won't weaken significantly until 2016/17 following interest rate increases led by the Reserve Bank of Australia.

In the meantime, BIS Shrapnel forecasts the strongest market conditions to be in New South Wales and Queensland due to limited supply, something to keep in mind for anyone considering Australian property investment

The Propertybuyer
Podcast

 
Fri 24 May '24
with Rich Harvey
Granny Flats: Boost Your Yields & Faster Mortgage Repayments
 
 
Fri 3 May '24
with Rich Harvey
Unpacking the Northern Beaches with Incredible Agents
 
 
Fri 29 Mar '24
with Rich Harvey
How to build a $7 Million Property Portfolio from scratch
 
 
Sat 16 Mar '24
with Rich Harvey
Why Invest in Melbourne?
 
 
Mon 26 Feb '24
with Rich Harvey
Sydney’s Inner West – Hotspots and Outlook for 2024
 
 
Mon 12 Feb '24
with Rich Harvey
Decoding Sydney’s North Shore Market – Outlook and Opportunities.
 

 

Listen to many more
podcasts on our
Podcasts page.