Welcome to a brand new year – a year that’s shaping up to be one of positive growth for the property market. Let’s take a look at how the market fared in 2014. If you were a seller, you probably had a good year as it didn’t take as long to sell property in 2014. During the year the time it took to sell a house in Sydney fell from 29 days to 26 days. In Melbourne it dropped from 35 days to 31 days and in Adelaide it dropped from 62 days to 50 days. However, if you were a seller in Perth, the story was different, with the time it took to sell a property increasing.
The limited number of properties for sale and relatively high numbers of prospective purchasers in most areas proved to be a boon for sellers, upping competition and very often prices. According to RP Data, at the beginning of the year Sydney had 22% less properties for sale than 12 months previous. Adelaide had 18% less properties for sale and Canberra had a whopping 41% drop in properties for sale.
Conversely, this decrease in supply wasn’t such good news if you were a buyer. With fewer properties to choose from and sales happening relatively quickly, there wasn’t much opportunity to haggle over price.
However, if you bought at the start of the year, the good news is that your property should now be worth more. During 2014, houses in all capital cities increased in value. Sydney topped the charts again with a 12 month increase of 13.2% and Perth, Darwin and Canberra are at the other end with property price increases of around 1.5%.
If you bought an investment property, you were fortunate that interest rates remained steady over the whole year. With interest rates at about 5%, it made paying off the mortgage a lot easier than it has been in previous years.
On the flipside, gross rental yields fell because rents didn’t increase by as much as property prices. On average, rents around the country increased by about 2% while property prices increased by 9%.
However, if you were a tenant in 2014, these relatively low rental increases were a bonus, although it was harder to find a property to rent as vacancy rates were relatively low. According to SQM Research, it was hardest to find a property to rent in Hobart and Adelaide. with vacancy rates of 1.3% and 1.5%, respectively. If you rented in Melbourne (2.5%) or Perth (2.4%) you would have found it a little easier as vacancy rates were highest in these two cities.
