2012 Property Update

2012 is set to be a year of recovery for most Australian housing markets according to the Australian Property Monitors ‘State of the Market‘ report to December 2011.

Senior Economist for the Australian Property Monitors, Dr Andrew Wilson, predicts that following a 3.5% fall over the year to December 2011, national median house prices should recover to rise between 3 to 5% over 2012. He noted that housing markets had entered a correction phase in 2011, but mixed economic performance, natural disasters and fragile consumer confidence exacerbated the reduction of buyer activity through 2011.

The rate of the forecast recovery varies significantly across the country with Brisbane, Perth and Darwin leading the way at 5 to 10%, Sydney and Canberra at 3 to 5% and Melbourne, Adelaide and Hobart at only 0 to 3%.

The forecast for Brisbane follows one of the worst results for the nation with median house prices down 7.5% over the year ending December 2011. The January 2011 floods were the main contributor to this result. The massively improved result forecast should eventuate off the back of a continuing resources boom, property shortages, population increases, rising incomes and improvement in confidence according to the report. Brisbane’s median price for houses is $425,551 and $354,204 for units as of December 2011.

Sydney has predictably performed best of the capitals in 2011 with median house prices relatively stable - not surprising considering its underlying lack of housing and associated costly rental market. Median house prices fell 1.3% over the year ending December 2011. Sydney’s median price for houses is $636,822 and $449,231 for units as of December 2011.

The forecast for Sydney provides a solid prospect for median house price growth of up to 5 percent in 2012. This growth will come mainly through the lower and middle band suburbs as buyers seek to maximise choices in a market characterised by chronic shortages of accommodation and Australia’s tightest capital city rental market. Sydney’s rents increased 6.8% for houses and 5.1% for units over the last calendar year.

The prestige market will remain quiet in Sydney in 2012 although some modest but sustained growth in house prices may be recorded towards the end of the year from a low base. This will be contingent on the flow-on effect of the resources boom driving a significant recovery in the sharemarket unleashing the wealth effect and the aspirational buyers that have been largely dormant in Sydney since 2008.

The New South Wales economy has performed relatively well in a difficult year behind only the resource giants of Western Australia and Queensland. Expect this performance to continue in 2012 underpinning positive housing market prospects and increased buyer activity.

What we need to remember is that property is an asset measured in 10 year cycles and there has not been a decade since the end of World War II that property prices have not risen.

For more information on the property market or your next property purchase please contact Prosper Group on 1300 664 373 or email enquiries@prospergroup.com.au

Posted in Residential Property by Chris on 02/23/2012 | 223 Comments

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