Buyers Make a Comeback
While many buyers kept out of the property market in 2012, there are signs of a comeback.
2012 saw many buyers adopt a 'wait and see' attitude, but they are once again becoming active as the market starts to stabilize and interest rate reductions lower the cost of ownership.
Four cash rate cuts by the Reserve Bank during the course of last year have meant that the rate now sits at a historic low of three per cent. The combination of low interest rates, improving rental returns and potential rises in home prices is tweaking buyer interest. The strength of the share market and relative economic calm overseas is also helping.
RP Data's Tim Lawless is among the analysts who believe house prices will make a modest recovery during the year ahead, driven primarily by low interest rates.
Chief economist at the Housing Industry Association, Harley Dale, also says he expects to see "some modest growth" on buying prices in 2013.
Property expert, John McGrath, predicts residential market price rises of 5-10 per cent. He also says: "rents will continue to climb due to the housing shortage, providing investors with increasing yields over the next few years."
Many agree that the recovery will be gradual and is likely to vary from city to city and even suburb to suburb according to demand.