3 March 2010

Media Release

The Real Estate Buyer’s Agents Association of Australia (REBAA) today revealed its predictions for the property market over the next 12 months.
Predicting a market hugely dependent on rising interest rates and tighter banking and credit conditions going forward, the Association said:

• Buyers will be looking for high capital growth, strong yields, properties with renovation potential to add value and refinance.
• Property prices will continue to rise in the key centres of Queensland, New South Wales, Victoria, South Australia and Tasmania. Sydney in particular has the greatest potential to rise due to pent up demand with increases of up to 10% estimated in the inner and middle rings this year.
• Motivated expat buyers will be looking to take advantage of low interest rates and relaxed offshore buyer restrictions. Generally expat buyers are looking for “no fuss/high return” and also “lower return/high capital growth opportunities’.

REBAA President Mr Byron Rose said after a busy end to 2009, investors had continued to show keen interest into the New Year with more buyers than properties.

“As always, interest rates will have a strong bearing on property prices this year but already in the first two months of the year we are seeing significant buyer interest returning to the market,” said Mr Rose.

“We expect the current high levels of buyer activity to continue for the first half of the year but we’re also ready for buyers to pull back from the market once the reality of rate rises hit home and as affordability in some states continues to decline.”

Scott McGeever, REBAA QLD spokesperson said: “In Queensland, we’re seeing more investors enter the market looking for no-fuss, high return, near-city units.

“Quality two bedroom, two bathroom units that appeal to professional renters in top locations near train and shops/cafes within four kilometres of the CBD are increasingly popular.

“Prices have continued to grow as buyer demand exceeds supply however if interest rates continue to rise, we expect to see buyers decline after another two or three rate rises.”

Rich Harvey, REBAA NSW spokesperson said: “In Sydney, the key areas for investors continue to be the Northern beaches, Inner West, Eastern suburbs and select parts of the North Shore. In regional areas we favour the Hunter Valley, Orange, Port Macquarie and the far northern coast of NSW.

“I believe the property market is in a rising phase which should continue solidly for the next three years. With unemployment declining, inflation in the ‘safe zone’, migration and population rates rising, upward pressure is being placed on demand. Sydney, in particular, will see solid capital growth because of our spectacular beaches, clean environment, beautiful harbour and wide range of housing styles.”

Michael Ramsay, REBAA VIC spokesperson said this year’s start had been one of the busiest in his 11 years working as a buyers agent.

“In Melbourne the demand has been such that an increase of 60% in supply from last year to over 2,000 properties a week has not been enough to temper the clearance rate which is averaging around 85%,” said Mr Ramsay.

 “We expect the market to hold firm until the end of 2010 and plateau during the first quarter of 2011 mainly due to interest rate hikes and an unsustainable increase in house prices.

“It is also interesting to note that overall, apartments are performing better than houses in regards to yield and capital growth. Confidence is very much apparent. Good quality properties in great locations are always highly sought after.”

Chris Waterman, REBAA SA spokesperson said: “This year we are seeing most sectors performing strongly, particularly investment properties in south-western suburbs around Marion and the Flinders University and Hospital precinct.

“Overall we envisage a strong prolonged period of growth pushed by the mining and defence industries. Continued rental increases are also expected due to an acute shortage of rental property which is driven by huge demand from overseas students.”

Rob Zubin, REBAA TAS spokesperson said: “Dubbed the best value capital city in Australia, Hobart and Tasmania are drawing a lot of interest from investors. The market has been significantly influenced by solid inward migration from the mainland fuelled by cashed up buyers looking for a lifestyle change and finding the lowest median house price in Australia.

“Demand is stronger that it has been for the past four years. Well priced properties are turning over very quickly. House prices are expected to increase steadily to around 6-8% over the next 3-5 years. So if you’re thinking of purchasing a property in Tasmania get in sooner rather than later.”

More information contact:

Byron Rose
REBAA President
Ph: 02 9327 6944/Mob: 0411 694 081