By Paul Wilson
BIS Shrapnel recently released a report that said that although there has been a slight decline in median real estate house prices during the 2011-2012 financial year it is expected that with compound increases we should see house prices rise approximately 7% in the next three years. In fact, the prediction could be as high as 17 percent for Newcastle,NSW.
Angie Zigomanis, property analyst and author of the study believed that there are several factors which are leading the turn-around in prices.
Economic growth, especially in the 2013/2015 period
Interest rate reductions
Increased mining activity
Tight rental demand
He believes that those who intend to enter the realestate market in the near future should be looking to do so based on the above factors.
Undoubtedly there are areas that will not move in price but as the economy improves there has always been strong movement in the larger city areas because that is where there is employment.
Families still like to live on quarter acre blocks of real estate if possible and it is the outer regions of the likes of Sydney, Melbourne, Brisbane and Perth that are expected to increase in price as buyers re-enter the market.
Property investors should keep this in mind because it is becoming harder and harder for young people to enter the market and young families are on the lookout for larger properties but also near transport, shops and schools.
Mr Zigomanis’ prediction for Newcastle is based on the above factors as he finds that once the outer suburbs become popular again so too do areas a little further out as families have to buy in areas that are affordable.
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