New data suggests property prices might increase further before they come down. An RP Data report commissioned by Aussie shows more than two in five houses and units sell over the advertised price in capital cities.
The report found than in the 12 months to June 2014, 43.6% of houses and 46% of apartments in Australian capital cities sold for more than their initial advertised price.
Properties in other city and country areas also exceeded price expectations, with 32.8% of houses and 37.2% of units selling for more than their listed price.
Sydney and Melbourne were the not surprisingly the best performing cities. The data revealed that 59.4% of houses and 63.6% of units in Sydney had very happy sellers, followed by Melbourne at 50.4% and 45.4%.
Aussie executive chairman John Symond
says the report shows “strong momentum” in capital city markets.
“Although value growth has been relatively weak to date in Brisbane, Adelaide and Hobart, these three cities have recorded the largest year-on-year jump in sales, which could be a pre-cursor to a greater pick-up in value growth as demand for housing rises. The new report also shows that city markets are much stronger than regional areas. For those looking for capital growth, the theme clearly indicates that capital cities are the places to invest, while regional areas are more about lifestyle than returns,” he said.
The report also showed that only 3.8% of houses and 4.7% of apartments sold at the list price. Symond says that borrowers can use this to their advantage in negotiations.
“It’s very surprising to note how few homes sell at list price, but it’s positive that there’s still an opportunity for savvy home buyers to negotiate down in some areas. Sellers and buyers should take list prices with a grain of salt as the results are working out to be quite different from original expectations,” he said.
, Reserve Bank board member John Edwards forecast that house prices will start to drop. According to Edwards, housing credit growth, high amounts of household debt and weak income growth would eventually cool the property market.