Fairfield, six kilometres north east of the Melbourne CBD, topped the list of suburbs to record inflation-busting rental growth for the year to January 2012 with rents rising 13.4% according to property manager Run Property.
I love Australia and its people. No other country or people have been kinder to Kim and me. So I write this blog with concern and hesitation, a little fearful for their future, as well as ours.
While property prices remained fairly subdued in 2011, weekly rents continued on an upwards path in most capital cities. Last year, Sydney was among the standout performers with rents increasing by an impressive 4.2 per cent for houses and 4.5 per cent for apartments. Great news for investors but spare a thought for all the tenants out there competing for their next home!
The first three years of US home prices coming down could be characterized as a reasonably steep downwards trajectory. Using a compounding growth rate, between April 2006 and April 2009 the annual rate of decline averaged 11.4% or 30.5% overall. Most of the home value destruction was over and done with in the first three years directly after the market peaked. Home values have come down a further 1.9% year on year (on average) since that time.
National Australia Bank has kicked off a home-loan war by pledging its standard variable rate will be lower than any of its major rivals for the rest of the year. The Reserve Bank is tipped to cut the official cash rate to 4 per cent today – its third consecutive reduction in interest rates – in a bid to provide some relief to struggling households.
Our housing markets ended 2011 in a better position to where they started and I am confident that the year ahead will be better for residential property owners compared to last year. Most owners should see their assets hold value or increase and this year could in fact be a good time for investor activity provided the world economy doesn’t move into severe recession as a consequence of the problems in Europe.
It now seems all but certain that the Reserve Bank will cut interest rates next month, with AMP’s senior economist Bob Cunneen predicting the cash rate will drop to 4.0 per cent.
It appears that the November rate cut has already worked its magic in the housing market, leading to the first lift in dwelling prices in almost a year. Before the rate cuts in November and December, supply and demand in the housing market was reasonably balanced, translating to a softening of home prices. But the rate cuts will serve to lift demand for homes and drive property prices higher over 2012.
Is the “boom” in the gold boom over? After touching $1900, it is now on its way down to $1500. Last summer, I wrote that I wanted to start buying gold in the $1300 range. It seems I may get my wish. The question remains, “Is it time to buy or sell?” The answer depends upon you. If you purchased gold over $1600 and cannot sleep if prices drop, you may want to sell.
“The Great Crash Ahead” author Harry Dent shares his predictions as to where the U.S. economy is headed in 2012.
Justin Wood is the director of Property Toolbox Australia, a successful investor and a leading expert in wealth creation through property, businesses and commodities.
Lillian is a successful property investor and business owner with over 7 years experience in the banking and finance industry.
Recent Comments