What’s in store for rest of year
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