Property Market Off and Running
Australia’s housing market recovery and revival has been confirmed, thanks to high clearance rates, low interest rates and an increasing number of buyers, according to Australian Property Monitors.
The February 2013 Housing Market Report says the sharemarket is also a solid leading indicator of housing market activity, particularly in relation to prestige properties.
“With the All Ordinaries now holding above 5000 for the first time in three years, a rising bull market will activate prestige markets that are finally showing early signs of emerging from a sustained period in the doldrums,” senior economist Andrew Wilson says.
“The international economic outlook continues to brighten, with a gradual recovery still on track in the US.
“China’s high growth is also holding firm and iron prices are at record levels, which is heartening news for Australia’s resource exporting economy.”
Sydney and Perth are the strongest markets, followed by Melbourne and Brisbane.
In Sydney, weekend auction clearance rates are tracking nearly 20 per cent higher than over the same period last year. Early season clearance rates (68 per cent in February) have been similar to those recorded during the boom period of autumn 2010 and are a positive indication of rising market confidence,” Wilson says.
“Signs are also emerging of a more generalised lift in Sydney buyer activity, with increased sales in the prestige market.”
Melbourne’s early season buyer activity has been similar to Sydney, with strong auction clearance rates recorded over February (68 per cent) and the middle-ring mid-price range suburbs back in demand.
And after years of economic setbacks and weather troubles, Brisbane is poised to record increased buyer activity.
“First homebuyers will however be lagging contributors to a market revival, with Australian Bureau of Statistics (ABS) December home loan data revealing the lowest proportion of Queensland first homebuyers in the market on record,” Wilson says.
Canberra might also face some headwinds in 2013. Its unemployment rate is 5.3 per cent, the highest ever recorded for Canberra by the ABS. Unemployment might also continue to hurt the Adelaide market. Its unemployment rate is currently 6.7 per cent, the highest of all the major capitals.
On the other hand, the Perth housing market continues to offer the best prospects of all the major capitals for house price growth in 2013, according to Wilson.
“Low unemployment, record population growth and a shortage of housing driving steep increases in rents are acting to intensify buying activity.
“Perth’s high rents are a strong motivation for first homebuyers, with Western Australia recording the highest proportion of first homebuyers in the market of any of the states.”
Similar to Perth, Darwin’s housing market is set for a strong year, building on its nation-leading performance of 2012.
“Low interest rates, a strong economy and a shortage of housing driving rent increases is set to intensify buyer activity and prices growth,” Wilson says.
Reported by Australian Property Investor – www.apimagazine.com.au – april 2013
