Property markets across the globe might be on a downward spiral at the moment, but experts believe fortunes will turn soon. Australia is expected to come out of this sooner than most other countries; prices of houses for sale in Sydney are expected to rise and lead this turn around followed by other major cities.
According to the latest Australian Property Directions survey by the Australian Property Institute (API), most metropolitan property sectors in the country will hit rock bottom around 2010. Recovery however, will start from late 2009 with the residential sector in Sydney. Other cities including Melbourne and Brisbane will follow in its wake.
The survey, which boasts of a respondents”” list that includes the who”’’s who of the Australian property universe found that most respondents were positive about the yields across all property sectors increasing.
””This is due to the risk weighting of capital, chiefly with higher interest rates and availability of funds,”” API Research Committee Chairman Phil Bennett said. ””Before, there was a very narrow band between the official rate and yields. That is now starting to increase, to reflect the true risk that goes with property which people to a large extent were leaving forward in previous years.””
””The result will be a potential for retail, industrial and commercial properties to decline in value over the next 12 months, as this new risk weighting is applied,”” he added. With rent increases expected only in the residential sector, yields for this sector will continue to be positive.
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