Reproduced with permission.
Well, what a year we’ve had in property. Some property prices have gone up but in the main, property prices have fallen around most of the states. Let’s look at some figures.
Capital City / Capital Growth
(12 months to end of Oct 2012)
Darwin / +8.6%
Perth / +3.5%
Sydney / +0.6%
Brisbane / -0.8%
Canberra / -1.6%
Adelaide / -3.5%
Melbourne / -4.4%
Hobart / -4.6%
All Australian Capitals / -1.1%
The above illustrates that on average, property prices have dropped by 1.1% across the whole country but some cities have performed much better than others. Darwin has done particularly well with a 12 month growth of 8.6% whereas Hobart property prices have dropped the most, by 4.6%.
There could possibly be some light at the end of this dark property tunnel as quite recently (last 3 months), property prices in most capital cities have increased.
Capital City / Capital Growth
(3 months to end of Oct 2012)
Darwin / +1.5%
Adelaide / +1.3%
Perth / +0.7%
Sydney / +0.7%
Melbourne / +0.4%
Brisbane / +0.1%
Canberra / -0.8%
Hobart / -5.7%
All Australian Capitals / +0.5%
These figures show us that the property market in all major capital cities (Canberra and Hobart are not considered major cities), have increased recently. Whether this upturn in growth can be sustained into 2013 and beyond remains to be seen but I would prefer for the most recent price data to be showing positive growth rather than a continuing drop in prices.
The capital growth hasn’t been great in recent times but for most people, investing in property is a long term strategy. For those of us who have held property for the long term, say 10 years, we have done fairly well. See the table below.
Capital City / Capital Growth pa
(over the last 10 years)
Sydney / +2.8%
Canberra / +6.1%
Melbourne / +6.2%
Brisbane / +6.7%
Adelaide / +6.7%
Hobart / +7.6%
Perth / +9.1%
Darwin / +10.4%
All Australian Capitals / +5.2%
Considering the last 10 years have also included the worst financial crisis since the Great Depression, I’d say long term property investors would have a smile on their face. On average, property prices have increased by 5.2%. Home owners in Sydney, our most expensive capital city, haven’t seen much growth but if you bought property in the resource rich cities of Perth or Darwin 10 years ago, you should be celebrating!
All things considered, our property market has performed quite well in the long term. I agree it hasn’t been pretty since the Global Financial Crisis (GFC) and 2012 wasn’t a year most property owners want to remember but we have to learn to take the good with the bad.
What can we expect in 2013? You’ll have to read the next newsletter to find out!
Happy House Hunting!
Written by Peter Koulizos, university lecturer, author and buyers advocate.
