House Rates In Most Cities Rising

Due to low interest rates, the value of city properties have experienced an increase in the last month prompting analysts to warn home buyers to expect tougher times ahead, but property owners will have a cause to celebrate.

In July of this year, capital city dwelling rose to 1.6%, based on the RP Data-Rismark Home Value Index, even as home buyers have yet to recover from a 1.9% increase last June. In Sydney, dwelling values were up to 2% in July, which means that its rate has been 6.5% higher in the last 12 months. Perth has also experienced a rise last month, with rates of up to 1.6% or roughly 8.3% for the last 12 months.

The slated interest rate cuts by the Reserve Bank of Australia (RBA) next week is expected to impact the price acceleration.

According to the director of RP Data, the rise in prices will most likely bring more attention as capital gains and rents are also increasing.

“The recent housing market correction which bottomed in May 2012, where values were down 7.4 per cent from peak to trough across the combined capital cities, together with mortgage rates moving to historically low levels, delivered substantial affordability improvements for Australian housing.”

“However, with Sydney, Perth and Canberra values now back at record high levels and some other capital cities not far off their previous peaks, there are likely to be a growing number of households who find it challenging to enter the housing market.”

Vendors and property owners are inclined to give fewer discounts at this time, especially when the sale of a capital city property can be as fast as 45 days. It’s a big improvement from last year’s 59 days.

But while prices in regions like Perth, Sydney, Canberra and Melbourne are good, the conditions are not the same for Darwin, Adelaide, Brisbane and Hobart.