State of the Australian Property Market

Depending who you talk to (Seasoned Property Investor or FHB) you will probably get a different response of optimism to where the overall Australian property market is at in terms of good buyer opportunities.

I've written in my Blog recently of my own situation as having 1 IP bought three years ago and due to capital growth I am quite positive to be buying again this year.

But talking to friends who are potential FHB and it is the same old story of un-affordability so interested to get your thoughts on the current state of the market.
 
Hi digs75,

We don't have one market for all of Australia so it depends on which market you are referring to. As for Qld (particularly SEQ) my personal opinion is that 2011 will be stable but relatively flat (ie., not huge gains or losses) however the outlook for 2012 as the financial impetus from rebuilding, pent up demand and confidence returns will see us on a steady upward curve again. This correlates with where the major banks are forecasting their long term rates at this stage. At the moment we have higher consumer savings rate than for many years as opposed to about 2007 where consumer savings were actually in negative territory. The start to this year (for SEQ) is difficult to pinpoint as in reality there hasn't been alot of sales compared to other years yet. There are buyers and sellers in the market just both are holding out as they are trying to pick what is good buying/selling with fewer comparables.
 
As the previous poster stated, it depends which part of Australia you're looking at.

I'm in far northern NSW and there is NOTHING happening here despite the usual spiel from agents. We sold a house in November 2009 for just over $700 000 and last week I ran into the agent who sold it for us and he said how lucky we were that we chose to sell then as we'd be lucky to get $600 000 for it in today's market. We put the money from the sale in a term deposit and rented while we kept an eye on the market. Prices seemed to keep dropping so we held off buying until we picked up a house for less than it was valued at. I think prices have even dropped again since then. IMHO though, prices were WAY overinflated here though - thanks to the whole 'seachange' thing. Now I think they've come back down to earth. The high-end of the market seems to have really taken a hit.

Looking forward to reading other's comments.

Cheers.
 
As the previous poster stated, it depends which part of Australia you're looking at.

Exactly!

Even in a city like Sydney, there are suburbs rising while others fall.
http://www.dailytelegraph.com.au/ne...-per-cent-growth/story-e6freuzi-1226024327487
SYDNEY'S fibro capital is booming, with sales records blitzed and a surge in prices as the rest of the NSW property market flatlines.

Blacktown will be the star of the Sydney housing market for the second consecutive year, with values up 7 per cent and more sales than any other locality.

Sales are nearly 10 per cent higher this year than last year, when Blacktown was the most popular suburb in Sydney with 619 house sales reported.

While Sydney's Eastern Suburbs experience price falls of up to 20 per cent, the Western Suburbs continued to rise...
 
Exactly!

Even in a city like Sydney, there are suburbs rising while others fall.
http://www.dailytelegraph.com.au/ne...-per-cent-growth/story-e6freuzi-1226024327487


The article you link to alludes Blacktown has the highest rate of dev't of new homes in NSW. It is common for older fringe suburbs with cheaper existing housing, to spike in median price when new estates represent a higher portion of sales activity, such as The Ponds.

Suburb level data interpretation is fraught with gotchas for the casual observer. Do you have repeat sales data of 50+yo homes that have increased 7+% in the last 12 mths?

RP Data info on Blacktown

Date Median House Price Median Unit Price
Mar-10 $375,000 $280,000
Apr-10 $378,500 $285,000
May-10 $382,000 $287,095
Jun-10 $380,000 $289,500
Jul-10 $370,000 $282,500
Aug-10 $390,500 $281,000
Sep-10 $370,000 $283,000
Oct-10 $380,625 $309,250
Nov-10 $375,000 $273,000
Dec-10 $382,500 $277,000
Jan-11 $380,000 -

From Mar10 to Jan11, median went up 1.3%.

From Aug10 to Jan11, median went down 2.7%.
 
Some interesting comments and insights and reading about the big drops in prices for some regional areas it would make me wary where to invest if purchasing in a regional area...although get it right and an investors portfolio will look quite healthy....

Thanks to those who voted in my online poll as well.
 
Suburb level data interpretation is fraught with gotchas for the casual observer.
Yes, it is and I bang on about it all the time. Here's one of my posts on the subject:
http://www.somersoft.com/forums/showpost.php?p=495466&postcount=3

The point really isn't though whether Blacktown went up, down or sideways. The point, being addressed to the OP, was that there is no one "Australian Property Market". In the same market, some suburbs will be going up, other will be falling and others will be trending sideways.

Do you have repeat sales data of 50+yo homes that have increased 7+% in the last 12 mths?
Residex is the only company that I am aware of that tracks resales of the same property. Bit even this is flawed because ot does not account for any renovations that might have been done to the property.
 
In my opinion for the Brisbane market it will be flat in the short term, there will be more room to negotiate with sellers that are motivated. With interest rates on hold it will be more of a buyers market and more buying opportunities.
 
I work with a lot of lenders and get direct feedback on a monthly basis (quant not anecdotal - get that most days) - Brisbane and SEQ (actually most of QLD) has had it's lending fall off a cliff. If they're not lending, few people will be buying.

We almost bought a house in a Windsor (2.5km from CBD) a few weeks ago - 9.1% yield after we bargained down. Our building report showed up something the previous (contract crashed due to non resident status) building report didn't hence the non purchase (and I read both). Would have been a reduction of 100k from what it got passed in at (non vendor bid) at auction five months ago.

Lots of bargaining room at the moment.
 
Depending who you talk to (Seasoned Property Investor or FHB) you will probably get a different response of optimism to where the overall Australian property market is at in terms of good buyer opportunities.

I've written in my Blog recently of my own situation as having 1 IP bought three years ago and due to capital growth I am quite positive to be buying again this year.

But talking to friends who are potential FHB and it is the same old story of un-affordability so interested to get your thoughts on the current state of the market.

Its ok at the moment. Yes it dipped a bit and is now recording small growth in most areas ( low single digit). This is just a natural tendency coming of highs. Given that interest rates are now steady ( and will be for the next 3 months), id go in and buy now before rates increase and before prices become more expensive.
The long term fundamentals of property all look favourable to strong price growth in the future. Characteristics such as strong population growth and strong jobs growth put australia ahead of a lot of other developed countries. Plus, our proximity to southeast asia gives us more of an edge as the place to be. Buy now when the market has paused to take a breather.

Buy the best you can afford; dont overstreach. Focus on prioperty fundamentals to drive capital gains: location (most important - must be close to where the jobs are), size, quality/features.
 
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