This summer is expected to be a hot one for the property market. With many economists predicting the official cash rate to remain low for some time1, this summer could be a great time to consider a property purchase.
Following the Reserve Bank’s 15th consecutive month holding the official cash rate at 2.5% in November 2014, Ninemsn Finance reported it was widely expected a rise in rates would not now come until mid-2015.1
Meanwhile, Fairfax’s Domain Group released its State of the Market Report for the 2015 financial year on September 18, predicting that Sydney’s median house price will lift between 5 and 7 percent during the 2015 financial year, while Melbourne prices are predicted to rise between 3 and 5 percent. While still a strong growth prospect, these numbers are around half the rate at which prices grew for the 2014 financial year, indicating prices may present more value for buyers in the coming year.
Over the years, well-selected property has certainly proven to be a strong asset choice, with values growing over time. Research by ASX and Russell Investment`s2 for example, recently showed that residential property delivered more steady gross returns over the 20 years to December 2013, compared to shares, returning 9.9 per cent per annum.
The current high demand for property is certainly highlighting the investment potential of real estate, recognised by investors across the country. But with strong demand, comes strong competition, so it’s important to be on the front foot when it comes to shopping for property this summer.