For those Australians contemplating getting into the property market now could just be as good a time as any.
Real estate heavyweight John McGrath declared last week that 2011 would be the year of the turnaround for the Australian property market and consensus is the fundamentals underpinning the Australian markets remain – that is rising rents, a national housing shortage and an improving economy.
“In my opinion the market will gather more strength in the first half of the year particularly in metropolitan markets with a spill-over effect into regional markets in the second half of the calendar year,” Mr McGrath said last week.
Sydney, Melbourne and Canberra would continue to lead the way with strong price growth, Mr McGrath said.
“These markets, being the key national markets economically and politically, reflect Australia’s strong financial position.”
While the forecast for 2011 is strong, softer conditions now as a result of hefty interest rate rises have created a real buyer’s market.
Increasing numbers of listings, weak auction clearance rates and a softening in values have all tipped the market in favour of the buyer.
These conditions combined with expectations of a pause in rate rises until well into next year, offer a window of opportunity for aspiring buyers to make their moves before the market heats up.
National Australian Bank chief economist Alan Oster believes the cash rate will remain on hold until May next year.
“Clearly each RBA meeting will remain data dependent. That said, clear evidence of the income and investment effects of the mining boom and its inflationary potential are unlikely to be evident until mid-2011,” he said.