Speculations on the Melbourne & Sydney property market following the Australia Bureau of Statistics’ (ABS) latest figures on home prices in the June quarter, have been pretty disparate.
According to the ABS, Melbourne & Sydney had posted home price rises of more than 1% in the June quarter, with prices rising by almost 9% in Sydney – more than twice Melbourne’s 4.2% gain. This comes on the back of a tighter regulatory environment, including the crackdown on errant foreign investors.
Experts from Morgan Stanley and Goldman Sachs have pointed out that a recession could be imminent as auctions for homes in Sydney and Melbourne soften.
Conversely, some of Australia’s leading economists say that there is no bursting bubble in the near future, predicting that Melbourne & Sydney could enjoy strong growth this coming year. An exclusive Fairfax Media survey of 25 leading economic forecasters reveals that most believe house prices have risen for fundamental economic reasons and NOT over-exuberance from investors.
Apparently, only a third of economists (7 out of 25) believe that there is a housing bubble in Sydney or parts of Melbourne.
Despite the woes of rising house prices, housing investment is deemed the only really bright spot and, perhaps, the wisest option for saving.
However, it seems that the more widely held view is that growth is set to moderate. UBS economist Scott Haslem says that the banks see a “moderation of strength”, not a “downturn”, and that “the outlook for housing depends on who and what you ask” while at the same time cautioning that some factors are hard to quantify.
At the end of the day, it is imperative that you read and do your research while keeping in mind the various methodologies used by the different experts in interpreting data. Be sure to questions and talk to as many people as possible to make informed decisions.
There is, for sure, a sound alternative. The housing market in Perth and Brisbane are more affordable, with prices expected to appreciate as they enter into an expansionary/ growth phase in the property cycle.
Looking for Australian property? Need to speak to someone? Call us at 03-2162 2260.
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