THE residential property market recovery is expected to continue across Sydney, Melbourne and Brisbane, with Sydney viewed as the strongest performer over the next two years, according to the 31st Australian Property Institute Property Directions Survey.
In 12 months time, Sydney’s residential property is expected to lead the way followed by Melbourne and Brisbane.
In two years time, Sydney is seen to be the strongest market along with Brisbane.
However the survey predicts Melbourne’s recovery will not progress any further in two years time.
“Respondents to the survey saw this improvement in the residential property market continuing across all cities in the next two years, while 70% also believe that the changing Australian dollar will have a positive impact on foreign investment in Australian property,” API NSW President Tyrone Hodge said.
The API survey found with regards to major factors impacting the Australian economy, the majority of respondents believe that interest rates and inflation will be similar for the next 12 months, while a large majority believe these will trend higher over the next three years.
Hodge said respondents also named a number of other factors that they believe will impact Australian property markets and returns in the foreseeable future.
“Many believe that the federal election result have provided more certainty of government which has positively influenced business confidence.
“Others believe that the recovery of the share market will result in increased investment in property by superannuation funds to balance their portfolios,” he added.
Meanwhile a small majority of respondents believe it is unlikely that non-residential property will outperform the equity market over the next year. Predictions for the next three to five years are varied, indicating uncertainty in the market about the likelihood of the non-residential property sector outperforming the equity market.
The survey also asked respondents about their predictions for investment growth in listed and unlisted property trusts and syndicates. While a majority forecast moderate investment growth for both listed and unlisted domestic property trust and syndicates, fewer respondents predicted strong investment growth than in the previous survey released in May 2013.
Only 11% of respondents to the most recent survey said they believe there will be strong investment growth in listed and unlisted property trusts and syndicates over the next 12 months. In the May, 30% believed there would strong investment growth for listed domestic trusts and 33% believed the same for unlisted trusts and syndicates.
Hodge said overall, growth for both domestic and international property trusts and syndicates remains positive for the next 12 months with 78% of respondents believing that there will be moderate investment growth in both listed and unlisted domestic trusts and syndicates.
“Respondents indicated that they are continuing to see greater inflows from domestic institutions, while others believe that self-managed super funds will boost the supply of funds into the unlisted sector,” he added.
Property Review
