Property market off and running

Property market off and running

Posted on Thursday, April 04 2013 at 9:09 AM

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.

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