30 November 2015
Low Interest Rates aren't the only Driver of Home Value Growth
It is generally believed that the current low interest rate
environment has been the main driver of the recent growth in
Australian home values. However, given the dramatically different
performance of capital city housing markets, with Sydney and
Melbourne consistently recording the strongest growth, it is clear
that many other key factors are also extremely important.
Employment growth is one such key factor.
CoreLogic RP Data recently highlighted that between December
2008 and September 2015, more than two thirds (66.9%) of employment
growth in capital cities and territories occurred in Sydney and
Melbourne, including a larger proportion of total full-time job
growth (74.2%). This may explain why home value growth has been
much stronger in Sydney and Melbourne over recent years than in
other capital cities.
Interestingly, full-time employment growth has recently ramped
up in Brisbane and over the past year ending September 2015; 24,713
full-time jobs have been created in Brisbane compared to 26,036
This strength in job creation for Brisbane may signal increased
housing demand during 2016.
Source: CoreLogic RP Data; ABS
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