ONE of Australia's leading analyst's has warned of mixed fortunes for the Australian housing market in the foreseeable future with very little if any capital gains over the next few years.
AMP Capital Investors Shane Oliver warned yesterday that investors selling out of the share market seeking gains in the property market may well be disappointed.
“While the turmoil in shares may see some investors switching from shares to property, a housing boom like that after the 1987 share market crash or the bear market in shares earlier this decade is unlikely,’ Oliver declared.
Oliver believes the housing fundamentals are currently very mixed.
He says that with shares hitting a major air pocket due to problems in the
Source: Real Estate Institute of
AMP Capital Investors figures show that the national average house prices rose by around 12% in 2007, with 20% or so gains in
“This meant residential property had similar capital gains to Australian shares last year — although shares came out ahead in total returns thanks due to higher income yields.” Oliver added.
The 1987 share price crash – which saw Australian shares fall 50% top to bottom – and the bear market in shares earlier this decade – which saw global shares fall 50% between March 2000 and March 2003 – contributed to house price booms in 1987-1989 and 2001-2004 as investors switched from shares to real estate.
Australian average house prices rose nearly 50% between December 1987 and December 1989 and they rose by 60% between December 2000 & December 2003.
Australian Property Journal
