Bullish views

Port Douglas & Mossman Gazette - - FRONT PAGE -

AF­TER a mi­nor set­back be­tween April and July, the West­pac-Mel­bourne In­sti­tute Con­sumer House Price Ex­pec­ta­tions In­dex posted a solid rise in Oc­to­ber from 46.9 to 60.4. This marks a new high for the up­turn that be­gan in Oc­to­ber 2011 but is still 20 points be­low the highs in early 2010.

Just over 70 per cent of con­sumers ex­pect prices to rise over the next 12 months, up de­ci­sively on the 59 per cent and 62 per cent recorded in July and April re­spec­tively.

Just un­der 20 per cent now ex­pect prices to hold steady. The re­main­ing 10 per cent of con­sumers giv­ing an opin­ion ex­pect prices to de­cline, the low­est share since July 2010.

‘‘The last few months have seen a sig­nif­i­cant shift in Aus­tralia’s hous­ing mar­kets with a surge in auc­tion ac­tiv­ity and signs of a quick­en­ing in price growth,’’ said West­pac an­a­lyst Matthew Has­san.

‘‘Over the full year to Septem­ber, dwelling prices na­tion­ally are up about 5 per cent, with some mea­sures sug­gest­ing gains have been at a dou­ble-digit an­nual pace over the last three months.

‘‘De­spite wide­spread me­dia cov­er­age of this re­cent strength­en­ing, few con­sumers ex­pect prices to rise at a dou­ble-digit pace over the next year (11 per cent na­tion­ally ver­sus 21-24 per cent in early 2010). Ex­pec­ta­tions may have been tem­pered by warn­ings of a po­ten­tial price bub­ble al­though the same warn­ings were is­sued back in 2010.’’

He said a fea­ture of the lat­est pick-up has been the un­even per­for­mance across states. Whereas dwelling prices are up 8 per cent year in Syd­ney and Perth, gains have been more sub­dued in Mel­bourne (+5.6 per cent year) and Bris­bane (1.1 per cent year).

The state split of con­sumers’ house price ex­pec­ta­tions has re­flected this di­ver­gence over the last year but now sug­gests it may be nar­row­ing. Whereas NSW and WA con­sumers had been more bullish, ex­pec­ta­tions in Oc­to­ber are more tightly clus­tered: the net per­cent­age ex­pect­ing price gains rang­ing from 68 (Vi­to­riac, NSW) to 58 (WA) with Queens­land lower at 47. The ques­tion was specif­i­cally about house prices ‘‘in your state’’.

There are some ad­di­tional nu­ances in the state de­tail around ex­pec­ta­tions for strong 10 per­cent-plus price gains.

This shows a higher con­cen­tra­tion of price ‘‘bulls’’ in NSW (14 per cent) and Queens­land (18 per cent), al­though for the lat­ter this is bal­anced against a no­tably higher pro­por­tion ex­pect­ing price de­clines (15 per cent vs 10 peer cent na­tion­ally).

‘‘Our anal­y­sis does point to a more varied price per­for­mance across dif­fer­ent parts of the Queens­land mar­ket.

‘‘Another no­table de­tail is the sharp rise in the pro­por­tion of renters ex­pect­ing dou­ble digit price gains with over one in four now pick­ing strong gains. That may ex­plain the weaker reads on ‘time to buy a dwelling’ across this sub-group,’’ Mr Has­san said.

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