RP Data has forecast that the “real test for the market” will come in late 2014, although property prices are unlikely to fall while interest rates remain low.
Senior research analyst Cameron Kusher said the spring season, from September to November, would give a clearer picture of what people could expect from property prices.
“I think spring is going to be the real test for the market. It was a really strong spring last year,” he told The Adviser in a video interview.
“I have my doubts that this spring will be as strong as last spring because property values are much higher and a lot of people have probably already purchased.”
Mr Kusher said different segments of the market have been experiencing different conditions.
“Since the market started to grow about two years ago, Sydney property values are up about 25 per cent, Melbourne up about 18.5 per cent, but what we’re finding is the lower end of the housing market is definitely starting to slow,” he said.
“What we’re finding is people are starting to get priced out of the housing market at that lower end, and that may have a bit of a snowball effect and start to slow the rate of growth.
“While we’ve got these low interest rates, we’re going to continue to see some growth in the market unless the Reserve Bank and APRA step in to do something to curtail the amount of lending at the moment.”
Meanwhile, RP Data has hit back at Fairfax Media after the media giant questioned the relevance of its monthly statistics.
Fairfax Media, which owns Property Data Solutions, said the “relentless noise” from property data providers could confuse people about what was actually happening in the market.
However, RP Data said that short-term price movements “cannot be viewed in isolation” and need to be viewed in the context of broader trends.
“Subscribers to our index data, such as the Reserve Bank and federal Treasury, rely on our monthly indices regularly, but they take a much more informed view of the results; interpreting the monthly statistics in context with the trend as well as other market evidence such as vendor metrics, supply introductions, housing finance demand and transaction volumes,” it said.
[Related: RP Data stats suggest market may be cooling]