Mar­ket is trend­ing up­wards

Hous­ing fi­nance fig­ures clearly show that ac­tiv­ity is on the rise among both first-home buy­ers and mar­ket vet­er­ans – with prices tipped to fol­low

The Courier-Mail - Property - - REALESTATE MARKET OUTLOOK - REIQ chair­man Pamela Ben­nett

THE month of July saw another round of bet­ter than ex­pected Aus­tralian Bureau of Sta­tis­tics (ABS) hous­ing fi­nance re­sults, es­pe­cially con­sid­er­ing that dur­ing the last decade, there has typ­i­cally been lack­lus­tre ac­tiv­ity in the amount of res­i­den­tial dwellings fi­nanced dur­ing that month.

Non first-home buyer (nonFHB) ac­tiv­ity in Queens­land was up 10.6 per cent across July 2013 to nearly 9000 dwellings fi­nanced, and even first-home buyer (FHB) ac­tiv­ity was up 7 per cent to 1,138. And while the REIQ es­ti­mated in­vestor dwellings fi­nanced were down 4.5 per cent to 4408, his­tor­i­cally a July down­turn is much more pro­nounced.

It can be easy to get lost when look­ing at long-term monthly data that is sub­ject to sea­son­al­ity. How­ever, look­ing at the Jan­uary and July mark­ers for 2013, com­pared to 2012, there has been a def­i­nite in­crease in hous­ing fi­nance ac­tiv­ity, es­pe­cially in the nonFHB seg­ment, which ac­counts for about 60 per cent of the over­all prop­erty mar­ket.

It’s no sur­prise then that in the re­cently pub­lished REIQ Queens­land Mar­ket Mon­i­tor (QMM) for the June quar­ter, we saw an in­crease in pre­lim­i­nary house sales of about 22 per cent, com­pared to the March quar­ter in 2013, and an in­crease of 40 per cent com­pared to the June quar­ter in 2012 for Queens­land over­all.

Now, al­though anal­y­sis about the ef­fect of fed­eral elec­tions has been mostly fo­cused on neg­a­tive im­pacts, what’s more im­por­tant for the Queens­land mar­ket is this in­creased hous­ing fi­nance and un­der­ly­ing sales ac­tiv­ity.

We are cer­tainly see­ing the ef­fect of the three cash rate cuts since De­cem­ber last year take shape in re­cent pe­ri­ods, with owner-oc­cu­piers fi­nally seiz­ing upon the bet­ter per­cep­tions about prop­erty that have been build­ing since last year.

How­ever, if his­tory shows any­thing, it’s that price growth ul­ti­mately fol­lows sales growth.

In the re­cent QMM, the 12 months to June 2013 yearly re­sults saw Bris­bane and Gold Coast post me­dian house price in­creases of 3 per cent and 3.1 per cent re­spec­tively, which has not been seen for some years. Then again, we haven’t seen sales growth dur­ing the past 12 months like this for some years ei­ther.

Back to the July ABS hous­ing fi­nance re­sults, with the fed­eral elec­tion in mind at that point in time – and not to men­tion that fi­nal La­bor lead­er­ship chal­lenge on June 26 – you’d ex­pect a sig­nif­i­cant neg­a­tive fall in th­ese July fig­ures, how­ever, this clearly was not the case.

Look­ing ahead to the Au­gust data, how­ever, we would ex­pect to see some de­cline in ac­tiv­ity over­all, given the start of the month saw the “of­fi­cial” elec­tion cam­paign pe­riod fi­nally get un­der way.

But in the grand scheme of things, the elec­tion ap­pears to po­ten­tially have been a mere pot­hole along the muchan­tic­i­pated road to re­cov­ery for the Queens­land prop­erty mar­ket.”

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