Property prices expected to remain flat

Home owners seeking to make a buck from their residential property won’t find 2012 a good year to sell as values are expected to remain flat, real estate analyst company RP Data says.

This follows falls of about four per cent in 2011.

“We don’t believe house prices will be going up this year,” RP Data senior research analyst Cameron Kusher told a mortgage conference in Sydney on Wednesday.

“The market is down and in most areas we’ll find that property values have fallen, but certainly across the cities there’s quite a diverse performance.”

During 2011, property values fell by around four per cent in capital cities and around 3.5 per cent in regional markets, RP Data found.

Mr Kusher said a recovery to the glory days of the nineties and noughties could be some way off.

“People aren’t out there actively looking to buy homes and until that mindset changes, until people stop saving like they are at the moment, until people show greater propensity to spend, the likelihood of any recovery and any real return to growth in property values is still some way away,” he said.

RP Data also found big discrepancies in the direction property prices.

In Sydney’s eastern suburbs and lower north shore price values fell by between 10 and 15 per cent last year but prices in the inner west of the city climbed eight to nine per cent.

Declines in regional markets were led by areas such as Cairns, Sunshine Coast, and the Gold Coast in Queensland and in south western Australia.

Hobart price values fell eight per cent last year and Brisbane values dropped by more than seven per cent.

Overall Australian sales volumes were 25 per cent below their 10-year average and the amount of stock on the market was near record high levels, RP Data found.

Mr Kusher said that underlying demand for housing remained strong because Australia was not building enough house stock.

“It’s just that at the moment people don’t have the confidence to go out there and buy new homes,” he said.

Property values were falling and rents were rising, underscoring the demand for housing, Mr Kusher said.

Commonwealth Bank chief economist Michael Blythe said that the Australian economy, overall, was going well and the central bank appeared to be happy that the subdued housing sector was making way for the mining boom.

– Author: Kim Christian Source: AAP