Australian Property News
Analyst’s report forecasts property recovery
Posted on Thursday, February 07 2013 at 10:42 AM
The property market has strong fundamentals in place for an upswing, according to PRDnationwide’s first Quarterly Economic and Property Report for 2013.
The company’s initial quarterly release for the year indicates confidence is rising in the property sector with its Time to Buy a Dwelling Index showing a significant increase in New South Wales and Victoria and a marginal increase in Queensland.
The index measures changes in consumer sentiment regarding whether it’s a good time to buy a dwelling.
Aaron Maskrey, national research manager for PRDnationwide, says the index is reversing a long-held trend.
“Over the past decade or so that index has been falling.”
Although having only a marginal increase, Queensland has the highest overall index score indicating it’s the state where most buyers believe the time is right for an acquisition.
There are more qualitative reasons for Queensland property buyers to be bullish too, according to Maskrey.
“I was talking to some colleagues from Sydney and Melbourne. They believe the recovery is going to be led by southeast Queensland because it’s more affordable compared to other states.”
The report is optimistic about a stronger second half of the year in 2013 for the Australian economy as a whole.
“Combined with the resurgence in China and a slowly stabilising US, if Australian unemployment can remain in check for 2013 and interest rates remain low, then rebuilding on Australia’s fragile confidence can continue,” it says.
“I think it’ll be gradual. It won’t be an overnight snapshot back to where we were over the boom times,” Maskrey says.
Tom Edwards, regional director for CBRE Residential Valuations agrees that property prices in 2013 are set to be stronger.
“We are seeing a bit more confidence in the market. I think January 2013 has started off with more confidence than January 2012. We are seeing a bit more activity out there,” he says.
Edwards believes interest rate falls are having an impact.
“I think that the compounding effect of the interest rate reductions have had an effect. There’s still talk about another one. I do think that (the market) is finally starting to see confidence because of the interest rate levels being very, very low.”
Although the future is difficult to predict, all the current signals point towards a better market, says Edwards.
“I think we can only go by what’s happening at the moment and there is more confidence out there early in the year so I hope that’s going to get some legs.”
PRDnationwide’s Monthly Wrap for January 2013 goes further.
“One thing is certain, the current buying conditions in property have never been as favourable as they are now, with low interest rates, more affordable prices and plenty of stock to choose from in most markets.”
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