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2013 Property Market Outlook
Economic Outlook 05
Market Outlook 06
Rental Market 18
Commercial Property Market 20
Rural/Regional Outlook 22
Real Estate Business Outlook 24
Perth, Cockburn Outlook 26
New South Wales Outlook 28
Victoria Outlook 36
Queensland Outlook 44
South Australia Outlook 52
Western Australia Outlook 58
Tasmania Outlook 64
Northern Territory 68
02 First National Real Estate 2013 Property Market Outlook
IntroductionFirst National Real Estate has again surveyed its 400+ member
national network to provide its 2013 Property Market Outlook.
This Update serves to compare market conditions experienced by
our members with the predictions of economic commentators and
property market analysts.
First National Real Estate members are broadly distributed across Australia, throughout cities, suburbs and country towns. As such, the networks estate agents are exposed to mainstream Australia and are intimately acquainted with the views of the public, their response to government initiatives, their levels of confidence and their approach to property investment.
Our agents survey responses have been compiled to develop a picture of the Australian property markets performance over the last six months, and their outlook for the coming six. Where we refer to members throughout this Property Market Outlook, we apply the term to network members who responded to the various parts of the survey. Where we refer to Chairs we refer to the First National State Chairpersons for respective states and territories.
Results and trends highlighted in this document represent the majority view of all respondents. A full breakdown of survey responses can be provided on request.
There is an overall Australian outlook, followed by a state-by-state outlook and then, most importantly, an outlook that provides an in-depth overview of what the residential, rental and commercial property markets are doing at local levels.
Over the past year the property market has performed relatively well, given it has been subject to an over-arching environment of weak business sentiment, elevated exchange rates, a confidence-sapping carbon tax, tight credit conditions and seemingly more unproductive turmoil than usual in the Federal Parliament.
032013 Property Market Outlook | First National Real Estate
IntroductionThe impact of this has been that, despite signs of recovery at the end of 2011 and early parts of 2012, the market remained relatively soft throughout 2012. From time to time in some places the market appeared to be fighting back, and slowly started to gain ground, after bottoming out across most areas of Australia. This view has been supported by our members in their survey responses.
The ongoing soft market was in line with what our member surveys told us throughout the year that the market would remain flat even in light of the improved affordability and market conditions.
This appears to be a result of ongoing uncertainty in global and domestic economies, which dampened consumer sentiment so the recovery could not gain any real traction.
There has been a modest upswing in dwelling values and transaction volumes, suggesting a slow consumer response to rate cuts, and there are other signs of a sluggish improvement in market conditions.
Towards the end of 2012, the spring season produced some excellent results. Overall, members expect the market will now continue to gain momentum, going from strength to strength as 2013 progresses.
Vendors are also readjusting their expectations and setting more realistic prices to meet market demand, which should also serve to spur activity in the sector. Nationally, 13.4% of dwelling sales transacted at a price lower than they were purchased for. However, vendors are discounting their asking prices by a less than a year ago.
This growing sense of optimism extends to members businesses as well, with the majority expecting their businesses to put in a stronger performance in 2013 - ultimately seeing them expand and, in some areas, even put on additional staff.
That property has turned a corner is evident, not only by our members responses, but by observation of what else is happening and being said in the industry.
The September quarter showed there was an upswing in the housing sector, with new lending up by 1.2% in the month, lendings to established market up by 2.1% and finance for new dwellings purchased advancing by 9.0%.
04 First National Real Estate 2013 Property Market Outlook
IntroductionIn addition, auction clearance rates rose to more than 60% in the peak spring selling season. The number of auctions taking place over the final week of the spring was 2,119, up from 2,102 the previous week. Melbourne recorded the highest percentage of successful auctions over the week, at 58.2% and in Sydney, the nations second largest auction market, clearance rates were 50.4% for the week.
While new dwelling construction figures show the sector is still struggling, as the property upswing continues to gain momentum, finance for construction is expected to improve. There is cautious optimism in the industry as 2011/12 saw new projects begin to increase, which, it is hoped, signals a return to decent construction activity in the future.
However, any construction recovery will be reliant to some extent on businesses and government. It is their challenge to set appropriate policies and ensure all forms of construction projects are in line with the requirements of the Australian economy which means new housing and development projects in all industry sectors, not just around the mining sector which currently dominates new construction projects.
The government also needs to consider tax reform policies to support the property market in Australia. Stamp Duty is widely recognised as the most inefficient of taxes in the country. Abolishing this one property tax will go a long way to stimulating activity, across the board, but especially for first home buyers who are increasingly absent from the market, despite the best market conditions imaginable.
A recovery is certainly underway as this document is being prepared, however it is precariously balanced with conditions still reasonably soft and buyers remaining in the drivers seat, at least in the short term.
Disclaimer: There are many uncertainties in forecasting movements in the market such as government
policy changes, interest rate changes and global economies. Therefore, the forecasts in this report
should be taken to be indicative of anticipated market directions only. First National Real Estate takes
no responsibility for actions taken on the basis of this report and encourages all vendors and buyers to
conduct their own research.
052013 Property Market Outlook | First National Real Estate
Economic OutlookThis economic outlook is based on industry insights and responses
to the survey sent to First National State Chairs in November last year.
Economic activity is Australia is expected to remain relatively soft
in the short term, however over the medium term it should prove
to be solid, underpinned by strong growth in business investment.
The mining sector will soften as a result of ongoing uncertainty over global economies and a slow down in Chinas economy, producing sharp falls in iron ore and coal prices. This, coupled with a high Australian dollar, is producing challenging conditions for the economy and, ultimately, the Australian property market. However, with China looking to float its currency, these challenges may not seem as daunting.
According to state chairs in New South Wales and Victoria, the floating of Chinas currency is expected to have a positive impact on their property markets.
The Reserve Bank of Australia (RBA) remains of the opinion the Australian economy will continue its slow but steady growth over the coming year, and that employment will drift modestly upwards. This view is based on the underlying principle that Europe will muddle through and there is no major fallout in global financial markets.
The challenge for Australia will be reduced confidence in the mining sector, where states reliant on mining and resources projects will be vulnerable.
The high Australian dollar will also prove a challenge, especially for rural and agricultural sectors and where property markets expect to see a rise in foreign investor activity.
First Nationals state chairs continue to lose faith in the Australian government, unanimously saying they do not believe the federal government is doing a good job of managing the nations economy. However, with the exception of Western Australia, all believe the RBA is doing a good job of managing monetary policy.
06 First National Real Estate 2013 Property Market Outlook
Market OutlookAustralias property market is definitely on the rebound, however, there
is general consensus that the recovery is slow and gradual. While
low interest rates and reducing house prices have helped improve
confidence to some degree, it has not been enough to bring about a
Industry data shows increases in housing finance in September and October, with early data in November suggesting this trend will continue.
New mortgage lending is still low, an indication people are saving rather than spending due to generally low consumer confidence. While there have been significant gains in conf