Four Factors Acting On The Melbourne Property Market

Accountants in Melbourne

Whilst the following four factors make a compelling argument to purchase property now, buyers must still be selective in their purchases due to a large increase in new dwellings (especially apartments) possibly leading to an oversupply.

-Low interest rates,

With some banks now offering less than five percent interest rates, the savings on interest rates are a large incentive for property purchases. Although interest on investment properties is fully tax deductible thereby offsetting a large portion of an increase in interest expense, owner occupiers are not subject to such tax deductions.

-Self Managed Super Funds,

Now with the ability to borrow funds in order to purchase properties, Self Managed Super Funds account for almost ten percent of property sales. Along with their growth in numbers, Self Managed Super Funds are definitely a factor (albeit small) driving the property market.

-Foreign Investment,

With Foreign investment in the Australian property marketing tripling from 2007-2012, and now accounting for around 14 percent of new residential purchases, the increased competition means higher prices for new properties in Australia.

-Low house prices,

With house prices relatively low (with regards to Australian average property price cycles), most statisticians will agree the Australian property cycle is currently in a trough and by reviewing historical trends, the market will be subject to a growth phase.

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