Property prices still continue to rise
If you have been keeping an eye on the value of your property investment portfolio over the last quarter then you’d be quite happy to note that unlike the first quarter of this year, property prices still continue to rise!
It appears that a very long general election, cold and wet weather and the effects of ‘brexit’ were not enough to stop property prices continue to rise over most of our capital cities.
CoreLogic’s monthly house price index indicates that most of the loss that we witnessed in Sydney over the first quarter has been gained again with house price growth of 6.8% in Sydney and about half that in Melbourne.
The further interest in what are already unaffordable markets is being attributed to the interest rate cut in May which gave owner occupiers and property investors a little more encouragement to spend more again on property. Another factor that supposedly increased property investment activity was the pre-election fear of losing out on negative gearing if Mr Shorten had ended up forming our new Government.
Domain Group chief economist Andrew Wilson said the Sydney and Melbourne results were not surprising, particularly after a month of strong auction clearance rates,
“Auction clearance rates increased in every capital city [in June] except for Melbourne, which was flat,” Wilson said.
“We would expect to see house price growth following these results.”
Sydney’s auction clearance rate increased to 71.7 per cent over June, compared with 69.2 per cent in May, Domain Group data shows. One year ago, the auction clearance rate was above 80 per cent.
It is probably worth considering if auction clearance rates in the high 60’s and low 70’s are particularly good, especially when we are looking at a hugely reduced number of auctions in the first place, so maybe these results are a little more surprising than we expected?
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