Newsletter Articles

2007 Property Market Outlook

The Real Estate Institute of Australia’s (REIA) latest Property Market Outlook provides an interesting insight into the year ahead.

Key highlights of the REIA report include;

Residential

House price growth for 2006 ranged from 0.6% in Sydney to 38.7% in Perth, however the next twelve months most capitals may experience cooler conditions:

• Sydney and Adelaide: Likely to remain flat

• Melbourne, Brisbane, Canberra, Hobart: Subdued price growth is anticipated

• Perth: Price growth is likely to remain stronger than in other parts of the country though the boom may be slowing

• Darwin: Likely to remain buoyant.

Investment

Rental demand is outstripping supply in every capital city, with a weighted Australian average vacancy rate of 1.7% - well below the industry benchmark of 3.0%. Over the year to 30 September 2006 rents rose by an average of 9.8% - outstripping inflation of 3.9%.

The REIA say the 2007 property market is likely to offer significant opportunities for long term investors. Over the past two decades, average annual returns have ranged between 14.1% for Sydney houses to 17.1% for Perth houses.

Commercial

The industrial property market will remain buoyant in 2007, reflecting the continuing growth in GPD, and recent changes to our superannuation system.