What’s in store for rest of year

Herald Sun - Property - - FRONT PAGE -

LAST year, just be­fore Christ­mas, Realestate asked some of Vic­to­ria’s lead­ing prop­erty ex­perts for their pre­dic­tions of what our mar­ket could ex­pect in 2013. Re­cently, we ran those pre­dic­tions past the ex­perts again.

Some were eerily close to the mark, oth­ers have since changed their tune.

But they’re all con­fi­dent their ex­pec­ta­tions for the rest of 2013 will be spot on.


Pre­vi­ously RP Data an­a­lyst Cameron Kusher pre­dicted stock vol­umes on the Melbourne mar­ket would re­main high and favour buy­ers, with prices to re­main steady.

RP Data stats show stock vol­umes are be­low the same time past year but rose 9.4 per cent in the last month.

And while parts of Melbourne were re­cently de­clared more seller-friendly by an RP Data-Com­mon­wealth Bank Home Buy­ers In­dex, the lower in­ter­est rates are still help­ing buy­ers.

How­ever, with es­tab­lished prop­erty val­ues grow­ing, Mr Kusher isn’t sure how the Re­serve Bank will re­spond.

‘‘Given the RBA has stated they would like to see a pick-up in hous­ing con­struc­tion and resur­gent value growth is not pref­er­en­tial, it will be in­ter­est­ing to see how this is man­aged with lower mort­gage rates,’’ he said.

Look­ing ahead he sees the lat­est rate cut adding fuel to the mar­ket re­cov­ery.

In­vestors may also be more tempted by stronger growth in Syd­ney, Perth or even Bris­bane where a longer cor­rec­tion than most cities is ex­pected to turn back up soon.


lit­tle bit wrong,’’ Mr Larocca said.

But he’s still not ex­pect­ing dou­ble digit growth for the year.

‘‘The rises we have had are more sus­tain­able than we have had in pre­vi­ous cy­cles,’’ he said.

He’d also hoped to see con­sumer con­fi­dence rise but feels it has fur­ther to go yet. ‘‘Con­sumer con­fi­dence re­mains a bit soft so we haven’t seen the rise in sales that is nec­es­sary for very strong price growth.’’


A bevy of tips from Mr Yates in­cluded a con­tin­ued low in­ter­est rate cli­mate, grow­ing de­mand from for­eign buy­ers and new de­vel­op­ments to gain pop­u­lar­ity in South Yarra, Rich­mond and Mid­dle Park.

With fall­ing rates joined by a fall­ing Aus­tralian dol­lar for­eign buy­ers are step­ping up their ac­tiv­ity, ac­cord­ing to Mr Yates. ‘‘For­eign buy­ers, and in par­tic­u­lar Malaysian and Sin­ga­porean, are cer­tainly en­ter­ing the mar­ket, and more no­tice­ably so of re­cent times with the plung­ing Aussie dol­lar,’’ he said.

And with the elec­tion now called he’s ex­pect­ing the mar­ket to move into growth mode by the end of the year off the back of grow­ing mi­gra­tion to Vic­to­ria, low in­ter­est rates, sta­ble em­ploy­ment and Melbourne re­tain­ing its po­si­tion as one of the world’s most live­able cities.


Mr Pabst ex­pected hous­ing in in­ner Melbourne would be the pri­mary area to watch for growth this year, though there would be growth in mid­dle-ring sub­urbs. He also fore­shad­owed RBA con­cerns around over­sup­ply of Dock­land and CBD apart­ments and buy­ers pur­su­ing lower qual­ity homes. He’s been spot on. ‘‘Buy­ers are now pay­ing an es­ti­mated 10 per cent more than this time last year for qual­ity es­tab­lished units and villa apart­ments un­der $650,000 sit­u­ated in well-lo­cated streets in Melbourne’s in­ner sub­urbs,’’ Mr Pabst said.

De­clin­ing in­ter­est rates and be­low­peak prices have been the key driv­ers, but limited houses be­ing listed has en­cour­aged com­pe­ti­tion from buy­ers.

‘‘The fe­roc­ity of de­mand in the mar­ket has seen prices rise across the board, not just for qual­ity as­sets, fur­ther sup­port­ing the claim that buy­ers are less dis­crim­i­na­tory than they were 12 months ago,’’ he said.


Easy-care life­style op­tions con­tinue to gain sup­port and the west still has most of the af­ford­able homes — in line with Mr O’Neil’s ex­pec­ta­tions. ‘‘The (easy-care) trend is gath­er­ing mo­men­tum as ev­i­denced by the fact that apart­ments and units are cur­rently av­er­ag­ing clear­ance rates be­tween 70 and 75 per cent,’’ he said.

He is stand­ing by his tip for at­ten­tion from long-term in­vestors to rise in Box Hill, Dan­de­nong, Footscray, Frankston and Ring­wood.

But has noted some cau­tion for Gee­long and Broad­mead­ows, which he also picked out.

‘‘There is still some de­bate about how ar­eas like Broad­mead­ows and Gee­long will per­form af­ter key em­ploy­ers in th­ese ar­eas an­nounced clo­sures and re­struc­tures,’’ he said.

But he has been sur­prised by the strength of sub­urbs with sought-af­ter school catch­ments, par­tic­u­larly in Bal­wyn, Hawthorn and Glen Iris.

And Mr O’Neil is ex­pect­ing spring to de­liver a surge in homes for sale, es­pe­cially once the elec­tion is re­solved, and help to ad­dress pent up de­mand from buy­ers.


Mr Nu­gent’s ex­pec­ta­tions for this year in­cluded a re­cov­ery in prices, stock lev­els to favour buy­ers, and com­fort­able mar­ket growth.

A full mar­ket re­cov­ery is ex­pected by Christ­mas. But Mr Nu­gent be­lieves 2013 is be­com­ing a ‘‘Goldilocks year’’ with stock run­ning hot and cold.

‘‘There’s been enough stock out there to sat­isfy de­mand whilst re­ward­ing most ven­dors with some cap­i­tal growth,’’ he said.

‘‘How­ever find­ing qual­ity stock to buy this win­ter has been hard.’’

Mr Nu­gent tipped blue chip prop­erty as the class to buy, but ad­mits com­pe­ti­tion is grow­ing and stock limited.

‘‘It may be the case that buy­ers will have to ex­pand bud­gets in spring 2013 to se­cure the prize,’’ he said.

He now has a few warn­ings: any fur­ther cuts to in­ter­est rates could lead to the Re­serve Bank hik­ing them up quickly and qual­ity prop­erty at rea­son­able prices may soon dis­ap­pear. * Robert Larocca has left the REIV, but pro­vided com­ments for this story be­fore his de­par­ture

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