Property Capital Growth Sats by Capital City…surprise with Melb & Syd…Brisbane low Volitility

Capital Growth PropertyFeature ArticlesProperty Capital Growth Sats by Capital City…surprise with Melb & Syd…Brisbane low Volitility
November 25 , 2016 /

Property Capital Growth Sats by Capital City…surprise with Melb & Syd…Brisbane low Volitility

According to new stats from Corel Logic, Melbourne has outpaced Sydney in the Quarterly capital growth stakes.  Jobs growth is creating population growth there.  Sydney is still growing in prices as a whole, all though I have also seen conflicting reports.  Brisbane remains steady with low volatility.

Volatility equals risk.  So Brisbane still stand out as a less risky investment with a lower entry cost.

For heavily leveraged investors, keeping risks to a minimum should be the priority.  Real wealth is created over time.

Property Investment analyst Michael Yardney 

After a head spinning 2015, our property markets started 2016 with a bunch of mixed predictions.

Some called a property bubble, while others forecast lower, but continuing capital growth.

Well…the scorecard is in for the first quarter of the year and our property markets slipped down a gear according to Corelogic, with an annual price growth rate of 6.4% over the last 12 months which, while being the slowest growth rate in almost 3 years, is still above Australia’s 10 year average growth rate of 5.%.

At the same time individual performances remain patchy and mixed, both between our various capital city markets and market segments within them, reflecting the underlying impact of mixed speed economies in the various states as well as local supply and demand factors.

Yardney1

Yardney2

Source: Corelogic

Melbourne now the leader of the pack
For the last few years it’s really been a two horse race with both the Sydney and Melbourne markets performing strongly, and the other capital cities lagging behind as can be seen in this chart:

Yardney3

Source: Corelogic

And while the conga line of overseas economists predicting doom for our property markets continued, the stats suggest we are not in bubble territory, as none of our capital city markets exhibited extraordinary growth over the last 10 years: –

Yardney4Source: Corelogic

Why Sydney and Melbourne?

The main reasons property values in our 2 big capital cities grew so strongly was their robust economic and jobs growth as well as massive population growth with around 60% of the immigrants coming to these two cities to chase the jobs there.

At the same time the outflow of residents from Sydney and Melbourne to other states, particularly Queensland and Western Australia, has slowed dramatically since the end of the mining boom.

Also property investors chasing capital growth have been targeting these cities, but this has now moderated.

…see full article here

 

 

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