Coast housing market set to bottom out

THE Gold Coast housing market is about six months off the bottom, according to analysts.

Two separate housing indexes showed a rise in capital city house values in June, indicating the slump in house prices appears to have bottomed and the market is about to improve again, underpinned by recent interest rate cuts.

But the Gold Coast recorded one of the largest falls of any region in the country and still has some way to go, according to RP Data research director Tim Lawless.

“I don’t think it has reached the bottom yet but the Gold Coast is probably approaching that mark and in the next six months should bottom out and start turning around,” he said.

Nationally, the RP Data Rismark findings showed capital city house prices rose a further 0.6 per cent on average in the month to July, the second successive rise after a 1 per cent jump in June.

Australian Bureau of Statistics data showed similarly positive results, with capital city house prices rising 0.5 per cent on average in the three months to June, the first quarterly increase in prices since the end of 2010.

Gold Coast home values were down 1 per cent last month on RP Data figures. In the past year, house values dropped by 5.5 per cent compared with 3 per cent in Brisbane.

More telling, the Gold Coast recorded a slump in home values of 15.3 per cent from the property peak in June 2009 to the end of July.

“That is one of the largest falls of any region in the country,” Mr Lawless said.

“But the most recent figures show that the Gold Coast has at least seen a slowdown in the rate of decline.”

He said a lack of confidence was one of the major factors still hindering the housing market.

“The Gold Coast has been beaten up a lot from a lot of angles,” he said.

“Confidence levels are not there yet for buyers to see that with the values reduced so much, there are some great buying opportunities.”

He said last month’s results nationally were heavily influenced by improving values across the most expensive city capital markets.

“The July rise was not as broad-based as the June results, with the month-on-month increase primarily being associated with the Sydney and Melbourne markets,” he said.

“The July result, when viewed together with the positive June result, suggests housing markets may be starting to respond to lower mortgage rates that — according to the RBA’s latest board meeting minutes — are about 50 basis points below their 15-year average.”

The ABS results for the June quarter, which showed house prices rose in five capital cities, also stated the results were “one more piece of evidence that the decline in house prices is at or close to an end”.

– Jenny Rogers – http://www.goldcoast.com.au/article/2012/08/02/435445_gold-coast-real-estate.html

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Coast housing market set to bottom out