Local Property Values Increase in Brisbane while rents tipped to spike
18th Dec 2009
An uncertain economy has not impacted negatively on the Brisbane housing market this year, with values increasing over the last 12 months, house prices in Brisbane have increased by 1.59% and units have increased by 1.11%. Recent statistics indicate that there has been an 11.71% per annum increase in Brisbane over the last 10 years for houses and 10.55% per annum for units. Investors who bought and held their property over the last 10 years will definitely have made money if they sold this year.
In America, unsecured loans saw foreclosures become rife over the last year and a half and the resulting oversupply of property on the market contribute to house values dropping significantly in some areas. However, it is debatable whether the Australian economy in fact suffered a recession at all, and the fact that property values have increased due to an undersupply of housing in capital cities just proves it.
Further evidence of a healthy marketplace for property investors is the fact that affordability for renters is likely to decrease over the coming year. Over the course of 2009, vacancy rates slipped a little due to the boost of the First Home Owners Grant and low interest rates. However, indications all currently point to an increase in rents next year thanks to a growing population and a shortage of new developments.
A report had revealed rents across Australia are likely to rise by 5.8% per year over the next three years, and by 5% in Brisbane, above the 4.4% average annual increase experienced between 2002 and 2008. New housing developments started in 2009 is at its lowest level since 1991, which is a direct result of tighter lending practises.
These forecasts are good news for property investors. Not only are they very likely to experience a low vacancy rate over the duration of their investment, but their repayments have the potential to be higher due to higher rents being received. In addition, values of houses and units in Brisbane are only moving in one direction, and that is up!