Mark McLeod - Dynamic Commentary 02/09/13 As always, buyer sentiment is heavily influenced by the combination of local area market conditions and the overall macroeconomic environment. In the lead up to the September meeting of the Reserve Bank (RBA), analysts were broadly in agreement that the official cash rate would remain on hold at 2.5%. HSBC chief economist Paul Bloxham told Property Observer low rates are supporting the housing market, with national house prices up 6.5% from the May 2012 trough. But Bloxham says a broader economic rebalancing is yet to be seen with Australia experiencing weak retail sales, fragile business conditions and poor confidence. The Courier Mail reported that many people are hoping the Federal election will kick-start a sluggish economy. In terms of the property market, Herron Todd White’s latest report says Perth is at the peak of its property cycle, while Melbourne is at the bottom and entering recovery. News.au reported in the country’s strongest market currently, Sydney, 550 auctions were held over the last weekend of August, compared to the 334 held during the equivalent weekend last year. Total Sydney listings surged by 44% in August. Meanwhile, commentator David Koch said rising property prices are proof of a patchy recovery and not the first indicators of a property bubble. Residential auction clearance rates in Sydney and Melbourne have been at levels last seen during the pre-GFC boom, leading the spruikers to predict a return to boom conditions. But analysts say Sydney’s strong price growth of 9-12% over the past year is limited to the middle market and outer suburbs and comes as no surprise after 10 years of stagnant growth. Perth and Darwin are in a similar boat and already slowing. Adelaide remains flat, Brisbane is still “soaking oversupply”, Melbourne has an “overhang of stock” while Hobart values continue in a downward trend. An article in the Sydney Morning Herald (SMH) said the proportion of Australian families that rent has now drawn level with those who own their home outright, as young people give up the dream of owning their own home. ABS data shows 30.9% of Australians owned their home in 2011-2012, the lowest level on record and well beneath the 42% recorded in the mid-nineties. One in five households now spend more than 30% of their income on housing costs, a percentage the experts deem as indicative of financial stress. With the future as unpredictable as ever, we encourage you to view all activity around your property this week in light of the current conditions.
Posted on: Tue, 03 Sep 2013 00:02:17 +0000
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