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 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.