Home News Property predicted to beat shares

Property predicted to beat shares

Font size :

Poor share market returns and rising property values and yields will draw investors into the residential property market this year, according to a leading expert.

Craig James, chief equities economist with CommSec, said that main headwind for the sector is weak affordability - driven by higher rents, property prices and interest rates.

"Australian housing markets are well positioned for both stronger activity and above-average growth in prices over 2008," said James. "Rents are soaring and there are only so many opportunities to take in shared accommodation," James said.

Australia's rapidly expanding population is expected to put extra pressure on housing. Over the 12 months to September, total population grew by 1.5% to 21.097 million people - the fastest growth rate in 18 years according to the Australian Bureau of Statistics.

Net overseas migration rose sharply by 179,100 - contributing more than half (56%) of the total population growth over the past 12 months. There were 278,500 babies born in the same period - a 5.8% increase from the previous year.

Nationally, WA recorded the fastest population growth at 2.4%, followed by Queensland and NT both achieving 2.2% increases. Victoria and the ACT added an average of 1.5% while NSW and South Australia saw population growth of 1%.

Queensland remained the top choice for interstate migrants with 102,200 people (almost 2,000 per week) moving to Queensland from other states and territories. This resulted in a net gain for Queensland of 27,000 people.

"While the supply of housing remains far short of demand, we're seeing that the housing sector is slowly starting to build more homes," said James. "The rental market is the tightest it's been in around 20 years and can't get much tighter. The strength in rental yield and a more uncertain outlook for the share market is likely to see more investment in housing over the coming months."

James said this expectation of increased investor interest in property, together with strong fundamentals for the owner-occupier market, point to stronger construction activity over the next 12-18 months. "The NSW housing market is fundamentally best-positioned for recovery, but the outlook also remains favourable for Victoria in 2008 and 2009, and Queensland in 2009."

James predicted residential property prices to grow by 10-15% in most capital cities this year compared to expected share market return of just 3% growth.

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Mortgage News and Articles

Mortgage applications drop in second quarter Mortgage applications drop in second quarter

This marks the “beginning” of a downward trend, says Equifax executive Read more

To break monopoly, many smaller lenders could become banks To break monopoly, many smaller lenders could become banks The proposed change could break the Big Four’s monopoly over the mortgage market and help families get cheaper home loan rates ... Read more

Borrowing against the home: A strategy to pay for aged care Borrowing against the home: A strategy to pay for aged care Such debts can generally be divided into long-term and short-term loans ... Read more

NAB slashes growth forecasts for houses, units NAB slashes growth forecasts for houses, units Numerous factors, including tighter credit rules and the growing supply of new stock, have reined in Australia’s seemingly unstoppable housing market boom ... Read more

More mortgage news and articles

Sponsored Links

Saturday, Jul 22, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Whether you're a first homebuyer, looking to refinance, or investing, it's important to have the right loan for your needs. Just fill in a few details below and one of our trusted mortgage advisers will contact you.

A quick & easy way to find the right home loan
  • Purpose of mortgage
  • Household Income
  • How much do you want to borrow?
  • How much deposit do you have?
  • How much is your house worth?
  • How much do you still owe on your mortgage?
  • What type of mortgage do you have?

  • How much is your new home?
  • How much do you want to borrow?
  • How soon do you want a mortgage?
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords