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Property market to turn corner

Staff Reporter 2 minute read

Australian capital city property markets are now either at or near the bottom of their correction phase and brokers may soon see borrower interest pick up.

In its latest market wrap released this week, property analyst Residex said the rate of national house price decline appeared to be slowing. In the 12 months to January the median house value fell by just 1.8 per cent.

First time buyers appear to be the strongest buyer segment, accounting for 25.4 of the market in December according to the Australian Bureau of Statistics.

Activity in the lower price brackets is tipped to rise with properties around the $500,000 mark looking most attractive.

Though it’s still early days, significant reductions to the cash rate, the beefed-up First Home Owners Grant and significant improvements in affordability bode well for an up-swing in broker business.

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The fundamentals are also sound for investors.

Soaring rental yields, low vacancy rates and high demand in most markets bode well for an up-swing in investment activity.

John Edwards, Residex CEO, said while it was too early to announce a solid turnaround there was clearly growing interest in property and indications that prices were bottoming out.

“I believe there needs to be a little caution as it is possible that we may see a ‘false dawn’... The rules remain, buying in this market is sensible provided purchases are well priced and the properties are well positioned and have the capacity to rent at improving yields,” he said.

Sydney, he pointed out, is showcasing strongest potential in the medium term, with most other markets close behind.

Only Melbourne appeared to have longer to go before it neared the correction phase, he said.

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