The paper "Home Value Growth, Investment in Housing Finance" is an outstanding example of a macro & microeconomics assignment. According to the report, home values have been increasing since the end of the financial crisis in December 2008, with Sydney and Melbourne accounting for accounting mostly for the increase. Home values in Sydney and Melbourne have increased by 52% and 46% respectively, and the rest of the cities are much less. Cumulatively home values have by 34% in Australian capitals. (RP Data) Regarding annual changes in home values, we can rank them as follows Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart, Darwin, and Canberra with 14.3%, 8.2%, 6.4%, 5.8%, 3.3%, 4.6%, 7.2%, and 1.7% respectively.
The rise of 9.3% for all Australian capitals combined (RP Data). Home value growth is a good thing for investors since their investment value increases and but also can lead to price overshooting, and this should be kept in check by the government (Betts). Transactions The rise values of the home are accompanied by the rise in the number of transactions. In July 2014, sales were 9.8% higher than it was in July 2013 and the total sales for the year 2014 were higher than for the year 2013by 9.8% (RP Data). Concerning sales, Melbourne and Sydney achieved the highest than Darwin and Canberra, which recorded lower sales.
However, Hobart and Brisbane realized higher growth in sales accounted for the high rate of increase in transaction activity. The increase in transaction activities is as a result of capital growth in these cities. Initially, Hobart and Brisbane lagged in capital growth, but now the rate of growth in transactions is high due to capital formation.
Capital growth in Hobart and Brisbane means that the two cities are picking up for heavy capital investments, this indications mean that there are new prospects for good investments in the two cities (Betts). Rental Growth For 12 months to September 2014, rental growth has increased by 3.1% compared to 2.1 % for 12 months toSeptember2013 (RP Data).
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