Wednesday 24 October 2007

Property Portfolio Update: 24 Oct 2007

The lastest monthly sales figures (September) for the suburbs of our home and investment property have just come out. There continues to be a lot of "noise" in the data, with monthly average sales prices being affected by the mix of properties sold in the month, but the uptrend in prices seems to be continuing. The average rate of increase in house prices in Sydney has been around 6% pa over the past twenty or thirty years, and it looks like this rate may apply over the coming 5-10 years, after prices remained flat since 2002 (when the last property boom collapsed in Sydney). However, if there are a couple of 0.25% rises in home loan interest rates over the next 12 months this may dampen demand, and prices, for another year or two. If I didn't already have a large part of my investment portfolio in residential real estate, this would probably be a good time to look at switching some funds out of the booming stock market and into Sydney property.

Copyright Enough Wealth 2007

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