Big sales pre­dicted for 2015

Don’t fear the nor­mal Jan­uary lull – the prop­erty mar­ket will pick up later in the year and per­form as strongly as ever, re­ports REIQ re­search an­a­lyst Yvette Bur­ton

The Courier-Mail - Property - - MARKET OUTLOOK -

THE lead-up to Christ­mas is al­ways a busy time, and the notso-stress-free process of buy­ing a prop­erty is largely done by buy­ers dur­ing Septem­ber and Oc­to­ber – the well-known “spring sell­ing sea­son”.

As such, the level of buyer ac­tiv­ity typ­i­cally eases in Novem­ber and into the New Year, and fig­ures re­leased by the Aus­tralian Bureau of Statis­tics on Mon­day re­flect just that.

Dur­ing the month of Novem­ber, both first-home buy­ers and non first-home buy­ers here in Queens­land recorded a drop in the num­ber of dwellings fi­nanced, down 8.1 per cent on the pre­vi­ous month and also down 5.3 per cent com­pared to Novem­ber last year.

The drop was largely due to a fall in non first-home buyer ac­tiv­ity, which saw a drop of 8.7 per cent.

How­ever, this fol­lows two busy pe­ri­ods of ac­tiv­ity dur­ing Septem­ber and Oc­to­ber, which saw dwellings fi­nanced above the long-term av­er­age.

First-home buyer ac­tiv­ity was also down (-2.5 per cent), mak­ing it the sec­ond con­sec­u­tive monthly drop.

This is likely at­trib­uted to an in­crease in prop­erty val­ues dur­ing the re­cent months.

The num­ber of dwellings fi­nanced to first-home buy­ers also con­tin­ues to track sig­nif­i­cantly be­low the long-term av­er­age of about 1800 a month.

It cur­rently sits at half that recorded dur­ing the last peak of first-home buyer ac­tiv­ity in late 2012, when the First Home Owner Grant was in­tro­duced.

In­vestor ac­tiv­ity dur­ing Septem­ber and Oc­to­ber was also strong, with both months record­ing an in­crease in the ap­prox­i­mate num­ber of dwellings fi­nanced for in­vest­ment pur­poses.

This level of ac­tiv­ity is likely to fuel fur­ther com­pe­ti­tion at the af­ford­able end of the mar­ket, ham­per­ing first-home buyer ac­tiv­ity.

It’s likely the ABS fig­ures for De­cem­ber and Jan­uary will be down across all buyer types, with most peo­ple on hol­i­days for the Christ­mas and New Year pe­riod.

And while 2013 saw a strong De­cem­ber quar­ter, it’s likely the 2014 De­cem­ber quar­ter may re­turn to the usual trend in sales ac­tiv­ity.

The ease in ac­tiv­ity, how­ever, doesn’t mean our hous­ing mar­kets have come to an abrupt halt.

With south­east Queens­land en­ter­ing the ris­ing part of the cy­cle, an eas­ing of ac­tiv­ity – which is a typ­i­cal trend for the end of year – bodes well for the over­all mar­ket, as it will pre­vent prices from over­heat­ing.

In Bris­bane’s last two ris­ing mar­kets in 2001 and 2006, both De­cem­ber quarters recorded a drop in house sale vol­umes.

Th­ese were fol­lowed by very strong sales vol­umes dur­ing the fol­low­ing March quar­ter (up by 10 per cent and 24 per cent re­spec­tively).

As such, the out­look for the res­i­den­tial mar­kets in Queens­land re­mains strong, de­spite the drop-off in ac­tiv­ity dur­ing the fi­nal months of the year.

Given the usual lull of ac­tiv­ity dur­ing Jan­uary, the an­nounce­ment of the state elec­tion is also un­likely to have too much im­pact on buyer ac­tiv­ity.

The key fun­da­men­tals of im­prov­ing over­all con­fi­dence and low in­ter­est rates will see our res­i­den­tial mar­kets per­form strongly dur­ing the com­ing year.

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