2014 forecast for property
This year hasn’t been spectacular but it has certainly been better than the previous two years. And I think the odds are stacked for 2014 to get even better.
With the exception of Perth and Darwin, all capital city property prices have performed better than their previous two years. Whilst Hobart prices are still decreasing, they are not falling as fast as they did in 2011 and 2012.
With all except one capital city (Hobart) experiencing positive growth in prices in 2013, what is in store for 2014 I hear you ask?
In my opinion, 2014 will be an even better year than 2013. Why I hear you ask? Read on.
It seemed to be the longest lead up to an election in history and this dampened business and consumer confidence for most of the year. However, the election has come and gone, a new government is in power and consumers and the business community seem to be willing to loosen their purse strings.
The U.S. economy is picking up gradually, as evidenced by a lowering of the unemployment rate and talk of cutting back on the “printing of money” to stimulate the economy.
Why do they want to cut back? Because the economy is responding to the stimulus and they don’t want it to overshoot and create an inflation problem.
The news headlines in 2012 and early 2013 were dominated by the Eurozone crisis. Many economies in Europe have a long way to go but there are positive signs in a number of countries that the worst is over.
Gross Domestic Product (GDP) is improving and the unemployment rate is decreasing. The Eurozone should continue to improve in 2014 and beyond which will result in greater business and consumer confidence around the world, including Australia.
Availability of finance
Banks were more willing to lend money in 2013 than in the four previous years. I feel that they too will loosen their purse strings as the Australian economy continues to improve.
With more people able to access loans, this will increase demand for property which in turn will increase property prices. However, I think one of the biggest factors influencing the property market is interest rates (cost of money).
Interest rates are at historical lows but with the political uncertainty in Australia and the economic status of some countries in 2013, many couldn’t see the opportunities, or were too wary to act.
Now confidence is returning to the market, property investors and future home owners are realising it’s a great time to buy. Rates will definitely move in the new year, but buyers should start responding more than they have in 2013