First National agents mostly expect house prices to remain subdued in 2012
The national residential market is anticipated to remain subdued in 2012 as consumers continue to pay off debts, according to a survey of the 350-plus First National Real Estate offices.
However, subdued house prices will stimulate some activity, particularly among bargain hunters who have been squirreling away savings and are now cashed up, according to First National chief executive Ray Ellis.
The vast majority of offices acknowledged the market had steadied or fallen, but there were distinct regional differences. The Sydney market is anticipated to stabilise first, as it has already shown signs of doing, but for some of the other capital cities, like Melbourne, there could still be some way to go.
TYPE OF MARKET – LAST SIX MONTHS 2011
National | WA | VIC | TAS | QLD | SA | NSW/ACT | |
Falling | 58% | 33% | 81% | 94% | 80% | 43% | 36% |
Steady | 36% | 34% | 19% | - | 13% | 57% | 59% |
Rising | 6% | 33% | - | - | 7% | - | 5% |
The First National agents expect the market will further moderate, although some areas have the potential to experience an even deeper decline.
TYPE OF MARKET – FIRST SIX MONTHS 2012
National | WA | VIC | TAS | QLD | SA | NSW/ACT | |
Falling | 25% | - | 31% | - | 20% | 29% | 32% |
Steady | 66% | 83% | 69% | 89% | 60% | 71% | 59% |
Rising | 9% | 17% | - | - | 20% | - | 9% |
The survey concluded it was unlikely uniform property prices will be seen in the 2012 Australian real estate market.
Some parts of the market will demonstrate greater price resilience, especially “muscle towns” with direct links to the mining sector or specific agricultural regions, Ellis suggests
“Other parts of the housing market may experience strong price deflations.”
He says stagnant prices are a normal part of Australia’s long-term cyclical housing market.
The housing market across Australia has remained soft in 2011, with home values dropping in all capital cities for an average dwelling price in October last year of $448,500.
Residential property prices are expected to bottom out in 2012, especially if official interest rates are cut below their current 4.25%.
City | Movement Year on Year | Median Dwelling Price |
Sydney | -1.1% | $498,000 |
Canberra | -1.1% | $475,000 |
Brisbane | -8.0% | $402,000 |
-5.4% | $458,500 | |
Adelaide | -5.2% | $370,000 |
Perth | -5.0% | $443,000 |
Hobart | -4.0% | $310,000 |
Darwin | -3.1% | $458,000 |
Regional | -3.4% | $316,000 |
Ellis suggests the combination of lower interest rates, cheaper homes and rising incomes is generating a welcome boost to housing affordability, particularly in those markets where value falls have been more significant.
HOUSE PRICES – NEXT SIX MONTHS 2012
Movements in house prices are expected to be mainly within the vicinity of 1% to 5%, but the majority of survey respondents anticipate them to be less than 1%. Small pockets of Victoria, South Australia and New South Wales/Australian Capital Territory are forecast to experience drops of about 10%.
National | WA | VIC | TAS | QLD | SA | NSW/ACT | |
Flat | 56% | 50% | 50% | 92% | 47% | 86% | 55% |
Downwards | 28% | 17% | 50% | - | 27% | 14% | 23% |
Upwards | 16% | 33% | - | - | 26% | - | 22% |
Tasmanian members all believe house prices will remain steady.
APARTMENT PRICES – NEXT SIX MONTHS
Apartment/strata property prices in the coming six months are expected to remain relatively flat although there could be some falls experienced. A small portion of the membership anticipates prices for this segment to rise.
Falls for apartment/strata property prices are expected, in the main, to be below 1% although some members say there is a possibility they could move as much as 5%. A very small portion of the membership indicates price movements in the area of 10%.
National | WA | VIC | TAS | QLD | SA | NSW/ACT | |
Flat | 55% | 34% | 56% | 87% | 42% | 71% | 60% |
Downwards | 31% | 33% | 38% | - | 42% | 29% | 20% |
Upwards | 14% | 33% | 6% | - | 16% | - | 20% |
Land Prices
According to the survey, most of the First National offices expect land prices to remain flat.
LAND PRICES – NEXT SIX MONTHS
Trend | National | WA | VIC | TAS | QLD | SA | NSW/ACT |
Upwards | 15% | 17% | 15% | - | 20% | - | 15% |
Downwards | 27% | - | 39% | - | 27% | 29% | 30% |
Flat | 58% | 83% | 46% | 95% | 53% | 71% | 55% |
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