Midyear state of affairs: A closer look at the country’s markets
With market conditions changing at varying degrees across the country, seven experts from Property Investment Profession...
2011 should be a strong year for the property market new research has found.
First National Real Estate polled its 450 agents and found that the vast majority expect 2011 to be a turn-around year for property, particularly as investor and first home buying activity return to more normal levels.
According to the results, some markets may still be flat but growth will occur over the next 12 months, although at more moderate rates than in 2009 and early 2010.
In general, the market is anticipated to gather more strength in metropolitan markets in the first half of the year, with improved confidence spilling over into regional markets in the second half.
While growth rates will not be as spectacular as they have been in previous years, property is still offering substantial returns and will lure investors back in larger numbers.
“Throughout 2011, the property market will continue to be supported by strong economic fundamentals such as strong population growth, low levels of unemployment and buoyant consumer and business confidence,” the report read.
The First National member survey showed 63 per cent of respondents expect an increase in investor activity in the coming 12 months, as a result of improved returns and increased investor confidence.
But while the outlook is mostly positive, 62 per cent of the surveyed respondents said they expect to see an increase in forced sales due to mortgage defaults.
Increases in forced sales often in turn translate into stagnating or falling prices.
The extent of the increase in forced sales will be dependent on how large interest rate increases are. If rate increases are kept to a minimum, or even remain stable, this will allow people the breathing space they need to adjust and so may avoid forced sales.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.