Property market moving with the times

26 November 2004

The recent low jobless figures may have a healthy effect on the property market according to the president of the Real Estate Institute of New South Wales, Mr Rowen Kelly. The figures show that the rate of unemployment has dropped to 5.3 per cent, with a corresponding increase in business and consumer confidence which is expected to breathe life back into the property sector.

"Individual finances are healthy and people are feeling optimistic about their own economic future. This is good news for the property market because property has traditionally been Australia's favourite means of wealth creation," Mr Kelly said.

"For the first nine months of this year we saw a definite slowdown in sales, with buyers being extremely cautious and many vendors misreading the market and overvaluing their properties," he says. "Between now and the end of next March we are likely to see the market start moving again with more interest from buyers and more properties being sold."

Mr Kelly also sees the current low interest rates and improved grants and bonuses for first home buyers as contributing to the increased confidence. The past six months has seen a steady increase in the number of first home owners in Victoria, taking advantage of the government’s new bonus. According to the latest Australian Bureau of Statistics figures, property bought by first home buyers made up 18% of the total dwellings financed in September 2004, which showed an increase of 20% on figures from the same time last year.

While the economy stays strong, Kelly sees no need for the market to slump, although he said that "any property buyer must consider that, like any market, the real estate market runs in cycles, experiences highs and lows and is influenced by a variety of factors including interest rates, migration and the local and global economies."