Residential property constitutes the major investment for most Australians, and is the largest sector of the property market. In 2010, residential property had an estimated total value of almost $3,700 billion, comprising around 8.95 million dwellings.
In 2011 we are seeing property price growth beginning to stall, what with the increasing interest rates and the expiry of the First Home Owner’s Grant Boost Scheme causing a decline in the number of first home buyers active in the market. Interest rates look set to increase again to stave off inflation.
Government spending is starting to diminish in terms of its role as a key driver of the economy, and there are signs that private investment may take over this function in the economy, with growth expected to accelerate from 2011/12. Furthermore, most residential markets remain in shortage, with low vacancy rates and solid rental growth coming through.
Source: Biz Shrapnel report on Residential Property Prospects, 2011-2014.
