Capital growth is expected to remain solid heading into 2010 as more investors enter the property market.
According to ANZ’s latest housing market report, 2010 will be characterised by fewer first time home buyers and higher interest rates.
The market is likely to be supported by a ‘neutral’ interest rate setting and an ongoing undersupply of housing magnified by strong housing demand fuelled by population growth.
According to RP Data’s weekly property activity report, demand continues to be consistently high.
Last week’s auction numbers were the highest the company has recorded since mid 2008.
There were 2,358 auctions held last week, half of which were held in Melbourne where the clearance was just under 80 per cent.
The national weighted clearance rate last week was 70.2 per cent.
RP Data’s Tim Lawless told Real Estate Business that while clearances have fallen from a high of 79.7 per cent nationally, the fact that the national rate of clearance remains above 70 per cent suggests that buyers and sellers remain closely aligned in market expectations.
"Property values have moved upwards across all capital cities over the last quarter (ending October), apart from the Perth unit market where values were down 0.5 per cent," he said.
The Darwin and Canberra unit markets stand out as returning the best capital gains over the last 12 months with a 22 per cent annual gain in values in both markets.
The most subdued performance was in Adelaide, where values were up just 4.3 per cent over the year.