The RBA has confirmed what we in the industry have known for some time – sentiment regarding the property market is becoming increasingly positive. This has also been reflected in the large numbers of potential property investors that have made the decision to attend a Blue Wealth event or that have met with one of our property specialists.
In its Statement on Monetary Policy, published in August, the Reserve Bank of Australia pointed to continued recovery in the residential housing market. RP Data and Australian Bureau of Statistics figures indicate housing prices are now 6½ per cent above their 2012 trough, and, in recent months, prices in most state capitals have increased. The demand for housing finance has also continued to strengthen, consistent with rising dwelling prices and lower interest rates, with the value of housing loan approvals rising at an annualised pace of 25 per cent over the past 6 months. This strong growth in loan approvals and the slow pace of growth in overall household debt implies that households with existing debt are paying down their debt quicker.
Rising property values and growth in loan approvals, combined with the stimulatory effects of the bank’s low interest rates, point to continued growth in residential property values. It is, however, important to note that the Australian property market is a segmented one, and drawing conclusions on its aggregate state can be troublesome. Blue Wealth’s research model takes into account this market segmentation by analysing a project on a macro to micro level – beginning with an analysis of the state of the economy and ending with a an analysis of the specifics of a particular project.