High hopes for housing market


THE housing market ended on a strong note in 2011 -interest rates dropped, the big banks followed suit and consumer confidence was rife. McGrath Real Estate chief executive John McGrath said the interest rate cuts translated into buyer enthusiasm. “Interest rates are definitely an important factor in people’s purchasing considerations, particularly in the sub $1.5 million market, but it’s not the only one,” he said. “There are other macro issues that are probably a greater influence on people’s current psyche. The European problems are a big dark cloud and if they’re resolved I think that will have a much greater positive impact on the actions of buyers than a quarter per cent rate cut.” Mr McGrath said Australian buyers did not need to see a lot of price growth to regain confidence; they just wanted to know that home values had stabilised. “A lot of people are sitting there with cash in the bank waiting for the signal that the market has levelled and now’s the time to buy,” Mr McGrath said in his summer market review. “I think there’s a good chance that will happen in the first half of 2012.” Payne Pacific Real Estate principal Christian Payne said if the economy continued to perform well in 2012, the housing market would perform well too. “Waterfront properties, those with a water view or near the beach, will be the biggest in demand. “I expect rents in Sutherland Shire will also increase because there is not enough supply.” With the first home owners’ stamp duty exemption ending on December 31, Mr Payne predicts the return of investors to the NSW market. “The stamp duty has been a success in stimulating the market and causing a transaction,” Mr Payne said. “Investors will replace the first home market. We saw a huge increase in first home buyers purchasing in Cronulla. “The shire is pretty attractive in terms of lifestyle with most people starting their search at a beachside suburb.” Mr McGrath said that first home buyer activity had surged and now comprised 16.4 per cent of the market, up 40 per cent on the same time last year. Lauri Phillips and Jay Gooch took advantage of the first home owners’ grant and stamp duty exemption when they bought a unit at Cronulla. “This Cronulla unit was a bit more expensive than our budget but it ticked off all the boxes with two bedrooms, a balcony, north-facing and a garage,” Miss Phillips said. Mr McGrath said although the market under $1 million was strong because of first home buyer and investor activity, the prestige sector still lagged. “We need to see unemployment down, retail spending up, a resolution in Europe, improved bonuses and a good consistent quarter on the stock market for the prestige sector to move,” he said. “I think we”ll see people getting back on the horse in 2012, as buying opportunities above $3 million are exceptional.”