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ISCOVER
Staff Reporter
While Australia’s property markets continue to make improvements across the board, values remain significantly lower than at this time last year.
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According to RP Data’s Cameron Kusher, although the weakness across the market has persisted, recent data provided highlights that the results across the three broad price segments are beginning to converge, with the most notable being the recent improvement across the most expensive suburbs nationally.
Over the 12 months to September 2012, the most affordable capital city suburbs recorded a value fall of 1.7 per cent; the broad middle 60 per cent of suburbs recorded a decline of 0.3 per cent; and the most expensive suburbs recorded a fall of 1.7 per cent.
“As the housing market emerged from the global financial crisis in 2009, property in each market sector recorded an increase in values,” Mr Kusher said. “The low mortgage rate environment and incentives for first time buyers saw the more affordable sectors of the market begin to grow first, followed by the premium housing market which shortly thereafter took over as the strongest performing sector. This may provide some insight as to how any future recovery in the housing sector may take place,” he said.
In the most severe cases across individual capital city markets, according to Mr Kusher, the most affordable Brisbane suburbs are 13.2 per cent below their peak and the most expensive suburbs in the city are 10.8 per cent below their peak while the most expensive Melbourne suburbs are 10.4 per cent below their peak.
By comparison, the broad middle market in Sydney is the only sector in any city in which values are currently sitting at all-time highs.
Following the onset of the GFC, capital city home values fell by a total of 6.1 per cent.
Mr Kusher said that once again, however, most of the recent improvement in values has occurred within the more affordable sectors of the housing market.
“The current data is a telling sign that although there have been ongoing weaknesses in housing markets, there are signs of improving market conditions. With current low interest rates coupled with recent value declines and subsequent improving housing affordability, there are signs of life returning to the market,” he said.
“Although we don’t expect the recovery in the housing market to be rapid, it is certainly looking as if 2013 will continue to see improving market conditions. It will be interesting to see what transpires over the next 12 months and whether or not the recovery mimics that of 2009 where the premium housing market takes over as the best performer.”
