While this last quarter of 2011 has seen a rush of activity from first time buyers, this will stall in 2012, said Laing+Simmons General Manager Leanne Pilkington.
The removal of stamp duty concessions for first time buyers will most likely be the reason for the foreWhile this last quarter of 2011 has seen a rush of activity from first time buyers this will stall in 2012casted drop in activity early next year.
"There is still strong demand from first home buyers in the sub $600,000 price range, however the announcement of the removal of concessions effectively pulled demand forward and we expect a slight correction in the new year,” Ms Pilkington said.
"Nevertheless, more affordable suburbs should still experience a regular flow of transactions as it's the top end of the market that is experiencing a more pronounced slowdown," she said.
Forecasting will be difficult for investors trying to find the next investment spots with the next 12 months' market activity being difficult to ascertain.
"A declining interest rate environment will support confidence, but this could be tempered by economic uncertainty and the potential impacts this could have on unemployment,” she said.
"Nevertheless, the fact remains there is insufficient housing to meet the current demand and this imbalance is exacerbated by the growing population. This is the constant that should keep the market ticking along in the uncertain times ahead.”
"There is little to suggest any major movement in prices across the board in 2012, as the supply-demand imbalance should keep prices stable," she said.
Investors searching for hotspots need to be aware of the risks of emotion and rumours.
"Each year it seems buyers find themselves scrambling to identify the next wave of hotspot locations on which to focus their property searching efforts. But this strategy is often based on emotion or even rumour and can often subject buyers to unnecessary risk," Ms Pilkington said.