Posted on Monday, September 12th, 2011 in by Matt Garmony
A recent report by RP Data has indicated property value growth has slowed in the past 5 years when compared to the past 10 years. RP Data reported, Perth’s median house price has grown 10.7% per annum for the past 10 years up until July 2011, with inflation only averaging 2.9% over the same period.
“Undoubtedly the growth in values has been strong and occurred during a time when access to credit was much easier to obtain and interest rates were inherently lower.” The RP Data report stated.
However in the 5 years leading up to July 2006 the average annual value growth for Perth was 21.2% when compared to the last 5 years up to July 2011 of just 1.1%. The growth in unit values has been slightly superior to houses. “The recent superior performance of units as opposed to houses continues today and is reflective of changing lifestyle patterns.” It is our opinion this may also be due to affordability issues as well as a trend for a greater number of people choosing inner city and inner suburban living.
Going forward, we may see a return to “normal” market conditions in the medium to long term with current constrained housing credit and affordability barriers to market entry, reducing the likelihood of value spikes.