Reality Check – What Lies Ahead?
Gazing through the crystal ball to determine how the property cycle will unfold in 2014 is difficult so instead of throwing out a number of speculations, we have looked at the black and white picture. In our opinion, 2014 will be an even better year in property. Why? We feel the momentum of the past 12 months should carry the market upwards in the first half of the year. The future is unpredictable as the impacts of currency markets, foreign buyers, superannuation rates and interest rates is inherently difficult to judge. However, we have outlined the fundamentals and pinpointed our reasoning to why we believe 2014 may just shine above 2013.
Federal Election
The election has come and gone, a new government is in power.
Overseas Economies – USA & Europe
The US economy is picking up as the media has outlined lowering the unemployment rate. In Europe, many economies still have a far way to go but there are positive signs in a number of countries that the worst is over.
Availability of Finance
Banks were willing to loosen their purse strings more in 2013 than in previous years. We think the momentum will continue as the economy seems to only be stabilising.
Interest Rates
Interest rates have remained at historical lows for such a long time, a growing number of people are set to invest in a rising market. However, economists are split. NAB think that the next move will be down to 2.25% in mid-2014. Others are more optimistic on the outlook and are looking for a hike to 2.75% in late 2014.
Auction Scene
By the end of 2013, we found auctions were heating up and competition became even more fierce. There is no doubt that the number of appraisals are on the rise as people are seeing the value of their property increase and so subsequently are moving their plans forward to sell.
The Agenda
Families tend to be driving the market already, their eyes are on the favourable combination of a low interest environment, relaxed lifestyle and confident market conditions in the Inner West. A recent survey from finance company Homeloans revealed one-third of respondents intend to buy an investment property in the next 12 months and a further 34% said it was on their New Year’s resolution list.
41 Electra Street, an 1850s Williamstown home sold at auction for $1.901 million in 2013.
