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Detached houses overtake units as the best performers in capital city markets
Topic Started: 9 Dec 2013, 05:27 PM (808 Views)
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Detached houses overtake units as the best performers in capital city markets

By Cameron Kusher
Saturday, 07 December 2013

Detached houses have now superseded units as the best performers across the capital city property markets. Up until recently unit values were showing a much stronger performance.

Across Australia’s combined capital cities over the 12 months to October, houses grew in value by 8.2% as opposed to units at 5.9%.

There’s a commonly held view that house values appreciate at a more rapid pace than unit values due to the underlying land value however, this has not necessarily been the case throughout most of the past five years.

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These results show that capital city values over the past five years to November 2013 increased at an average annual rate of 3.7% compared to growth of 4.0% per annum across the unit market. If we look at the two previous five-year periods we see that growth in house values outstripped unit values.

Between October 1998 and October 2003, house values rose by 15.0% each year compared to unit value growth of 11.1%. Between October 2003 and October 2008 house values increased at an average annual rate of 4.9% compared to 3.6% for units.

Strong growth in house values over the preceding two five-year periods highlights a time when houses were typically favoured over units. However, with current mortgage rates extremely low, buyers are potentially stretching themselves financially in order to purchase a detached house rather than a unit.

Read more: http://www.propertyobserver.com.au/trends/detached-houses-overtake-units-as-the-best-performers-in-capital-city-markets/2013120766666
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Houses back outperforming units - the pronounced trend amid 2013's best and worst performing Sydney suburbs

By Jonathan Chancellor
Wednesday, 18 December 2013

House price growth in the top performing Sydney suburbs has done markedly better compared to the growth in top performing apartment suburbs, according to the latest findings from Onthehouse’s property research arm Residex. There was also greater weakness amid the poorest performing units than the house localities.

"Given all the hype around units, this may surprise buyers," the consulting analyst for Onthehouse, John Edwards noted.

Historically houses have outperformed units in capital growth - not necessarily by huge margins - and then of course over a few recent years we started to see good capital growth levels with apartments sometimes exceeding that of houses.

The brief trend came amid the push towards apartment living due to a demographic shifts, the shortage of housing, affordability, as well as changing lifestyles and the increased importance of proximity.

But it appears issues of increased apartment supply has possibly caught up with the trend which appears to be returning back to normal.

Edwards told me in 2013 Sydney houses had outperformed units in all respects.

"This comes down to house and land supply not meeting demand. A shortage of stock in the house and land market is driving up prices up”.

He stresses his list of best performers are indicators of how a market is going, and "not necessarily the place to rush out and buy in."

“Strong performing suburbs are often areas which have already seen the majority of their growth for this current cycle”, he said.

Mr Edwards said that knowing where a suburb is in its growth cycle was "key" to identifying the opportunity within that area.

“If you combine the knowledge about a suburb’s growth cycle along with research data, suburb information and if you find out what the public considers the best streets are, then good buying decisions should result.”

Looking overall Edwards noted the median value of houses in Sydney was now nudging the $750,000 mark following a high rate of growth. It sits at $749,500 for houses with units median value in Sydney at $521,500. There has been 10.5% annual growth for Sydney houses compared to 4.3% for Sydney units in the year to November 2013.

"Residex models predicted growth, but not to this magnitude," he said.

But there had been periods when unit growth exceded house growth including the 2009-2010 financial year when Residex tracked annual Sydney house growth at 4.25% compared to 6.5% for units. At that time the 10 year growth gap was a narrow 6.8% annually for houses and 6.35% for units.

And the 20 year growth data puts Sydney houses at 6.97% annually compared to 6.18% for units. So not that bigger difference with investors therefore wisely considering both investment types in their portfolio.

Read more: http://www.propertyobserver.com.au/news/houses-back-outperforming-units-the-pronounced-trend-amid-2013-s-best-and-worst-performing-sydney-suburbs/2013121767003
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Alex Barton
19 Dec 2013, 08:42 AM
Houses back outperforming units - the pronounced trend amid 2013's best and worst performing Sydney suburbs

By Jonathan Chancellor
Wednesday, 18 December 2013

House price growth in the top performing Sydney suburbs has done markedly better compared to the growth in top performing apartment suburbs, according to the latest findings from Onthehouse’s property research arm Residex. There was also greater weakness amid the poorest performing units than the house localities.

"Given all the hype around units, this may surprise buyers," the consulting analyst for Onthehouse, John Edwards noted.

Historically houses have outperformed units in capital growth - not necessarily by huge margins - and then of course over a few recent years we started to see good capital growth levels with apartments sometimes exceeding that of houses.

Houses on large lots will outperform units in cities, but eventually Australians will have to accept that as our cities grow larger we will have to adapt to more dense types of accomodation - Apartments and Townhouses.

In the country and on city fringes detached houses on large lots will still be available, but out to 15 Klm of the CBD it's no longer possible to sustain houses on 1000 Sqm. It's a luxury that we can no longer afford.

In New York City in 1980 the population was 7 Million - how big is Sydney and Melbourne now - approaching 5 Million and growing fast.


ref - http://www.nyc.gov/html/dcp/pdf/census/1790-2000_nyc_total_foreign_birth.pdf
Any expressed market opinion is my own and is not to be taken as financial advice
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