The growth in house prices remains a mixed bag, with some suburbs and regions recording close to double-digit growth as others barely move.
Property prices in Sydney and Melbourne will stay high as constrained supply of new housing, high immigration and the probable end of the interest-rate rising cycle keeps buyers interested.
It is the upper quartile price bracket in both cities – the top 25 per cent in terms of median prices – with buyers who are less sensitive to interest rates, that are mostly leading the price recovery, says Tim Lawless, the research director at CoreLogic. The Central Coast is the poorest performer in Greater Sydney at 1.4 per cent and Melbourne’s west is the southern capital’s poorest performer at minus 1 per cent.
“Housing shortages are set to continue, leading to both higher rents and home prices,” says Commonwealth bank economists Harry Ottley and Belinda Allan. With the Reserve Bank of Australia leaving the cash rate on hold, and prices rising, more people could be thinking now is the time to buy, says Shane Oliver, the chief economist at AMP.
SQM figures for July show a rental vacancy rate of 1.6 per cent in Sydney and 1.3 per cent in Melbourne, well below the 3 per cent that is considered to be a healthy balance between landlords and renters.A research paper by think tank Per Capita’s Centre for Equitable Housing, estimates landlords in popular tourist regions, including Sydney and Melbourne, can make more money from just 100 nights on Airbnb than they can from a full year’s median rent from a long-term residential tenancy.
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