PROPERTYprices across Australia were on a the slide during 2012, along with interest rates – great news if you were buying, but not so great if you were selling.
According to property valuation companyRPData, house prices in Australian capital cities dropped marginally, by 0.4 per cent, in 2012, following a 3.8 per cent decline in 2011, while apartments posted a 1.6 per cent increase in prices following a 2.6 per cent drop in 2011. Overall, prices were 5.7 per cent lower at the end of 2012 than their October 2010 peak.
Property experts are forecasting marginal growth in prices in 2013, but despite further interest rate cuts by the Reserve Bank of Australia expected along with falling mortgage rates, any rise in property values is unlikely to be dramatic.
‘‘Looking intomycrystal ball for 2013 I don’t see that toomuch is going to change,’’ saidRPData senior research analyst Cameron Kusher.’’
‘‘ I believe that demand for credit will still be quite low despite the likelihood of further interest rate cuts.
‘‘Those markets which have undergone either longer corrections (Brisbane and Perth) or deeper corrections (Darwin) will see values rise over the year, albeit not by very much.
‘‘I believe Sydney will also continue to see values increase at low levels such as those recorded this year.
‘‘On the other hand, the remaining capitals will struggle to see any value increases over the next year. Overall, this points to fairly similar housing market conditions persisting across the capital city markets throughout 2013.’’
One of Australia’s big four banks, NAB, is forecasting a further 0.4 per cent increase in prices nationally in 2013, with rises in all states except Victoria.
The outlook is better for 2014, withNABforecasting a 1.7 per cent increase over the next two years.
More optimistically, SQM Research, an independent property research company, is forecasting a rise between 4 per cent and 7 per cent in capital city property prices in 2013, with Darwin (14 per cent), Perth (12 per cent) and Sydney (9 per cent) leading the charge.
According to NAB’s latest Residential Property Index, a fear of losing their job is the biggest factor holding back Australians from purchasing property and therefore keeping prices flat, followed by limited access to credit.
MrKusher argues that interest rate cuts are no longer having the same effect in encouraging potential buyers to jump on to the property ladder. Instead, Aussies are saving and paying down debt rather than spending.
If you decide 2013 is the year to buy, you should start by comparing home loans and shop around using a comparison site such as RateCity.com.au.