Returns on property rose in 2012

Returns on property rose in 2012

Posted on Wednesday, January 02 2013 at 1:48 PM

Despite a year of ups and downs and flat price growth, property has emerged as a sound investment method.

CommSec chief economist Craig James says total returns on residential property, taking into account by prices and rents, grew by four per cent in 2012.

By comparison, returns on cash investments rose by 3.7 per cent on average in 2012, James says. Both were dwarfed by average sharemarket returns, which grew by a staggering 19 per cent.

RP Data-Rismark’s Home Value Index shows capital city home prices were down 0.4 per cent for the year, indicating significant declines have slowed.

A modest rally in most major markets in the second half of the 12 months helped to recover losses in the first six months.

Cameron Kusher, RP Data senior research analyst, says capital city values remain 5.7 per cent lower than their historic highs of November 2010 but are up almost two per cent from their low of May last year.

Dwelling values are higher than a year ago in three of the eight capitals, being Darwin (up 8.9 per cent), Sydney (up 1.5 per cent) and Perth (up 0.8 per cent).

Rental growth outpaced value growth last year, with capital city dwelling rents up three per cent in 2012.

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