From: Michael Croft
Property market seen slowing in 2002
Feb 19 13:00
Jim Parker Aust Financial Review
Australia's residential property market is set to slow this year from record highs as first home buyers drop out of the market and as investors become more selective, according to Westpac Bank's latest property outlook.
The office market is likely to remain pressured by corporate downsizing, the travel downturn will continue to squeeze the hotel market, although the outlook for retail and industrial property is slightly more promising, Westpac says.
In the fourth publication of its report 'Outlook for the Australian Property Markets, 2002-2005', Westpac concludes that investors will find it difficult to find tenants for all types of property in the coming year.
However, it says low speculative supply under construction should support the commercial market through the coming period of weak demand.
"Although new projects are under construction in most sectors, they're generally pre-commitment led and not due for completion until 2003," said Westpac's head of property markets, Mr Frank Allen.
"However, the housing market, which last year hit record highs, is anticipated to slow as first home buyers and investors become less active," Mr Allen said.
The large number of first-home buyers who became owner-occupiers last year by taking up the Federal Government's expanded subsidy would also reduce the number of tenants available to rent investment properties.
"With supply levels in some markets increasing in 2002 and investors accounting for up to 50 per cent of the new apartment market, vacancy rates are likely to rise and rent fall," Mr Allen warned.
However, the larger existing home market was unlikely to fall as much as the first-home buyer and investment markets, while continuing low interest rates should continue to buoy values this year.
"Overall, we expect that existing house prices will stabilise over the year, with pressure to fall not coming until interest rates rise in 2003," he said.
Property market seen slowing in 2002
Feb 19 13:00
Jim Parker Aust Financial Review
Australia's residential property market is set to slow this year from record highs as first home buyers drop out of the market and as investors become more selective, according to Westpac Bank's latest property outlook.
The office market is likely to remain pressured by corporate downsizing, the travel downturn will continue to squeeze the hotel market, although the outlook for retail and industrial property is slightly more promising, Westpac says.
In the fourth publication of its report 'Outlook for the Australian Property Markets, 2002-2005', Westpac concludes that investors will find it difficult to find tenants for all types of property in the coming year.
However, it says low speculative supply under construction should support the commercial market through the coming period of weak demand.
"Although new projects are under construction in most sectors, they're generally pre-commitment led and not due for completion until 2003," said Westpac's head of property markets, Mr Frank Allen.
"However, the housing market, which last year hit record highs, is anticipated to slow as first home buyers and investors become less active," Mr Allen said.
The large number of first-home buyers who became owner-occupiers last year by taking up the Federal Government's expanded subsidy would also reduce the number of tenants available to rent investment properties.
"With supply levels in some markets increasing in 2002 and investors accounting for up to 50 per cent of the new apartment market, vacancy rates are likely to rise and rent fall," Mr Allen warned.
However, the larger existing home market was unlikely to fall as much as the first-home buyer and investment markets, while continuing low interest rates should continue to buoy values this year.
"Overall, we expect that existing house prices will stabilise over the year, with pressure to fall not coming until interest rates rise in 2003," he said.
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