2010 Property Outlook
When you consider what has gone on in the world over the last 2 years Australian property has remained remarkably resilient. Despite the dire predictions of doomsayers that property values would collapse by 40% most markets held their ground and by the end of 2009 had begun to increase.
The only sector of the market that did get hit fairly hard was the multi-million dollar luxury market. There were certainly bargains to be had there. But just watch how quickly this segment will bounce back.
If we gaze into our crystal ball there are a number of factors pointing towards a very positive 2010 ..
1. The Recession we never had
It's also pretty remarkable that we have begun to increase rates. No one likes rate increases but this is a reflection of an improving economy. More on that below. We have also seen unemployment slide backwards. Again there were predictions of unemployment going to 7%, 8% some even suggested 10%. It would seem unemployment peaked at somewhere around 5.7 - 5.8%. Seasonally adjusted it now sits at 5.5%.
2. Record population growth
Banks continue to remain very restrictive with their guidelines for property development. Whereas prior to the financial crises lenders would assume some risk in the deal they are now essentially looking for high profit, zero risk deals.
Government, primarily state and local also present the other major roadblock for development. According to the Property Council of Australia's Development Assessment Report Card
3. Rents expected to rise in 2010
4. Interest rates are still low
While it is likely we will see some rate increases this year rates still remain relatively low. The cash rate is still sitting at 3.75%. There's also a good chance that the RBA will see banks have done some of their work for them by increasing rates beyond cash rate movements.
5. A new wave of investors is going to hit the market
According to a recent survey by
According to Australian Finance Groups Mortgage Index the percentage of investment loans has shot up by 21% from December 2008 to December 2009. So the savvy investor has been sneaking along underneath the radar picking up property last year.
But don't panic you haven't missed the boat just yet. But equally I wouldn't be sitting back for too long. Remember the last property boom that started in 2001. Median property prices in
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