The Australian residential real estate market performed incredibly in 2010 with our growth being the 2nd highest globally. This was even more evident in Melbourne where the REIV has indicated double digit price growth.
The greatest growth was experienced in the first 2 quarters which was quickly slowed by the RBA's November interest rate increase and further financial pain was caused for home owners and buyers by the banks increasing their rates far in excess of the RBA indicator.
In the latter months of 2011 the number of homes on the market reached record levels with in excess of 1,000 auctions across Melbourne over three consecutive weeks. This high supply level and the influence of interest rate hikes reduced auction clearance rates in the last weeks of the year and created a more level market for both sellers and buyers. With strong demand still present, we found that most realistically priced properties continued to sell well.
The impact of a record Australian dollar and tighter controls put on foreign investment in residential real estate was expected to provide relief to Australian national buyers. However, we continue to see a large proportion of homes sold to foreign investors though they are not placing the upward pressure on prices as previously seen.
2010 certainly saw periods of fluctuation and as the year progressed price growth slowed following significant economic influences. We are continuing to see lifestyle trends such as sea changers, downsizers and 1-2 person living with a social life focus, so popularity of low maintenance, conveniently located units/apartments has soared breaking the age-old tradition of purchasing land.
Look out for tomorrow's post, what can we expect from the real estate market in 2011?
in Miscellaneous