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What apartment glut? Property prices to look up

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Apartment prices in most of Australia’s capital cities are likely to continue to grow despite speculation there will be a glut of this type of residential accommodation in some markets, according to senior property industry figures.

Asti Mardiasmo, national research manager for Australia-wide real estate franchise PRDnationwide, says low interest rates, cheaper petrol and a low Australian dollar are fuelling both local and foreign demand for apartments.

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Sydney-based SQM Research’s managing director, Louis Christopher, says while Australia’s capital city apartment market is different from state to state, apartments in the eastern seaboard cities, particularly Sydney, are set for more price growth this year.apartment-prices

Dr Mardiasmo says low interest rates and cheaper petrol have given consumers more “disposable income’’.

“This means more people will be able to get into real estate market, or if they are already in it, offer a higher price (for an apartment),” she says.

“In 2014 there was a slight dip in capital city apartment prices, but that was in response to the Federal Budget and high unemployment rates.

“In recent times there has been some positive macro economic indicators – a lower Australian dollar and continuing low interest rates – that will positively assist homebuyers.

“So, in 2015 I don’t see apartment prices across the board decreasing drastically. Maybe they will dip slightly. The possibilities are either a slight dip or an increase.”

The PRDnationwide spokesperson says significant foreign – mostly mainland Chinese – investment in apartments is also supporting strong pricing levels.

“I would say there is a larger Asian investment population in Australia because our dollar is low,’’ she says.

Mr Christopher says while the apartment market in Australia’s capital cities is diverse, prices in Brisbane, Melbourne and Sydney are forecast to rise this calendar year.

“The apartment market in each city tells its own story,” Mr Christopher says.

“There have been very strong price rises in the Sydney housing market, with very strong demand for the off-the-plan apartments. This has been driven by investors both local and off shore. Sydney will be the strongest (for apartment price growth). Our forecast for Sydney is for an eight to 12 per cent increase in apartment prices this calendar year.’’

The property analyst says Melbourne apartment sector has experienced a mixed 12 months, describing the central business district market “as flat’’ because of “a constant oversupply of new stock’’.

“But Carlton, Richmond, Albert Park and St Kilda have been steady markets, with (price rises) of between seven and nine per cent. Our (2015) Melbourne forecast is for price growth of between five and nine per cent.’’

Mr Christopher says the Brisbane apartment market should experience price growth of between three and seven per cent.

“Other markets including Adelaide and Perth have been flat, recording modest gains in prices of between two and three per cent,’’ he says.

“Hobart has bottomed out while Darwin is seeing falls in unit prices.”

Dr Mardiasmo says apartment/townhouse accommodation in Australia’s urban areas will increase in popularity in the coming years.

“Townhouses, like apartments, are on the rise because they are small and low-maintenance,’’ she says.

“They have a little bit of a back yard but they are relatively low maintenance.’’


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