Perth, WA -- (SBWIRE) -- 11/04/2014 -- Interest rates continue to remain at record lows when the board of the Reserve Bank of Australia kept rates at 2.5 per cent in a meeting earlier this month. A combination of low rates and a growing economy have contributed to strong increases in the property market across the major capital cities.
Perth experienced strong growth with median housing prices in the metropolitan area jumping more than 9% to a record $550,000. Meanwhile, median unit prices increased 7% to $450,000. These are certainly strong numbers while other cities experiencing similar growth.
But analysts are predicted a peak during the spring season.
A high sales turnover is expected over the next few months due to increased demand following years of caution and low interest rates. Spring is typically the time of year that generates the highest number of property listings which results in busy sales activity.
Cameron Kusher, RP Data senior research analyst notes that the Perth market was "well into the upswing, closing in on the peak" of the current cycle. High value growth over the past year is driven in part due to low interest rates and a number of other factors including strong demand from property investors.
This period of strong value growth is expecting to be followed by moderate growth. The RBA has even cautioned in its Financial Stability Report warning that soaring housing prices could affect the overall economy. Measures are expected including an increase in interest rates changes to lending practices.
These measures are not expected until next year but will likely contribute to growth slowing down in the property market.
Increased activity in the housing market is expected as the spring season is likely to see an increase in property listings which will help to attract more buyers. While the market may seem volatile, the long-term outlook remains positive.
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