Wednesday, January 18, 2012

Week three, all is still good in real estate....LIVE IN THE MOMENT.

As we said last week, the market in 2012 has started with great gusto but we're holding our breath waiting to see if this is a blip or a new year trend and the start of a new cycle.

It's way too early to call...but notably the Hills and rural areas have not seen any noticeable change from last year. On the other hand, the Fleurieu has seen the busiest start we have experienced in years.

Multiple offers, people arguing that they would have paid more after missing out to another buyer - all the issues associated with the boom markets have resurfaced in two short weeks... quite staggering.

The auctions start over the next two weeks and that will be interesting. Return to school will be the next phase, it always is.  We will have a clearer picture by mid February. And of course, all the clowns arrive back from holidays in the Canberra Circus too, and they played no small part in what happened last year.

As we continue to point out, real estate is all about confidence. Essentially 2011 was an election year, with an entirely new and scary tax system - that alone was enough to kill a property market. Then Europe, yes it will continue to haunt us this year, but hopefully people will become more accepting, realise they're sick of all the day to day drama and just get on with their lives.

When it comes to property, housing needs change, and there is only so long you can put off moving. Last year with 30% less people moving, it's inevitable that sooner or later those people will reappear.

Prices? We watch volumes of people moving and movement of prices. Prices relate to affordability and interest rate drops directly impact on affordability. Reducing interest rates and rising salaries will combine to stem any downward pressure/movement, which was such a feature of last year's market.

However, the lower prices of 2011 are unlikely to bounce back to their peak any time soon. Why? Apart from affordability issues, Australia is now one of the most expensive housing markets in the world. The Australian Dollar has made us internationally uncompetitive for real estate, in my view, and this, combined with the tightening of policy on foreign investment, has impacted on our market. Many would argue this is a good outcome, I guess that depends whether you are a buyer or a seller.

So there you go. An amazing and surprising start to the year and for sellers, plenty of buyers committing. So enjoy the moment. Live in the now.

Anthony Toop
Follow me on Twitter: @Anthony_Toop or call 0418 824 188

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