Sydney and Melbourne To Remain Strong For Another 6 to 12 Months
Phil McCarroll writes a piece for the website Your Investment Property where he quotes a survey citing that the prices in Sydney and Melbourne are likely to rise for another 6-12 months. The top financial institutions are buoyant about the prospects of these two capital cities at least over that period.
Survey conducted by API Reveals Sydney in good light
The Property Directions Survey conducted by the Australian Property Institute (API) had respondents posting their views on the Sydney property market. 44% of them see an upward trend continuing in the Harbour City for a year and 33% of them feel that the city will run out of gas in another 6 months.
Brisbane is the safest market
Respondents believe, as a consensus, that the Brisbane property market is much more secure and unlikely to hit a bubble any sooner than Sydney or Melbourne. 70% of respondents feel there is no bubble in Brisbane, while 24% feel there might be, and 6% have refrained from voting on the issue. For Sydney, half the respondents are inclined to believe a bubble is in the making and half of them think otherwise. For Melbourne, 56% are for a bubble and 44% are against it.
Low interest rate
The low interest rate is believed to be the single largest determining factor behind the large capital growth witnessed by Sydney. This is the popular vote from the respondents, as 80% feel that interest rates will rise over the course of next three years.
You can read the original article here.
Come 2016, Melbourne may beat Sydney for the first time in the current property cycle’s capital growth race. While Sydney may register a mellowed down 4-9% value growth, Melbourne is likely to sparkle with an 8-13% growth.
Naturally, questions of a bubble are going to be posed and it is safe to assume that those capital cities lying closest to their economic fundamentals will be able to keep it at bay. Yes, Melbourne may have to contend with affordability issues in certain pockets, something that hasn’t happened till now.
