US property market rebounds
Property prices in the United States climbed in the year to November 2013 and Australian investors are increasingly taking advantage of opportunities in these markets, according to two multinational real estate companies.
RE/MAX has reported that US property prices were 11.5 per cent higher in November 2013 compared to the same month in 2012. The company said this was the best performance for the US property marker in five years, and likely signalled an imminent boom here in Australia.
“Despite the predictions of myriad commentators over the past few years that the US market was doomed for decades to struggle, the past 12 months saw property prices rise in almost every US state, with California and Nevada increasing in excess of 21 per cent year to year,” RE/MAX Western Australia managing director Geoff Baldwin said.
“This positivity in the market has come despite continuing tough rules around lending, plus a very slow recovery across the rest of the US economy.”
Mr Baldwin said he expected US prices to continue rising in 2014 and beyond, and this was likely to be reflected in Australian prices.
“The Australian real estate market has for decades been a mirror of the US market and, despite the fact that stricter lending ensured we did not experience the same pain as the United States, renewed confidence there will almost certainly reflect positively in Australia,” he said.
Mr Baldwin said ‘informed observers’ were predicting the US property market will boom within three years.
Mr Baldwin’s predictions come as another real estate group, Ray White, is reporting increased Australian investing activity in the US property market.
Ray White said Australasian investors have been quick to snap up US properties being sold and managed by the group since it established its first US office in October 2013.
"Investors are identifying fantastic value in US property and consequently, we are transacting between 20 and 30 properties per month,” Ray White Surfers Paradise director Greg Bell said.
“We are based in the United States’ strongest rental market, Atlanta, where renovated, freestanding homes are selling for less than $100,000.
“The investment return on the properties is phenomenal and far surpasses what is achievable on our own shores.
“Because of that, a number of investors we have dealt with have bought four or five properties to create a comprehensive investment portfolio.”