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With the rollercoaster of local and global events during the first quarter of 2011 now mostly behind us, a significant window of opportunity has opened to owner occupiers with a long term outlook. |
It’s fair to say that the residential property market has cooled from its 2010 highs, with the latest NAB Quarterly Australian Residential Property Survey – March 2011 suggesting that nationwide prices will increase only marginally over the next year. However Angus Raine, CEO, Raine & Horne, says the ability of owners and buyers to take a long range view is the key to success in today’s market. “A quality, well-located home should be regarded as a long term asset, and this approach is essential in the current climate.” The Raine & Horne chief believes the lifestyle opportunities afforded by inner city locations across the major capitals will continue to appeal to homebuyers. “Inner city living with homes in close proximity to shops, leisure facilities and good transport links will continue to prove attractive for buyers. Mr Raine cites the limited supply of stock in inner city suburbs, as well as the opportunity to add value through restoration and renovation, as factors which will underpin price appreciation. Interestingly, on the issue of housing supply, the latest data from the Housing Industry Association (HIA) shows that housing starts are set to fall further behind this year. “Housing starts are forecast to fall by 15 per cent to a level of 143,430 in 2011, wiping out a majority of the short-lived, stimulus driven gains of last year,” said HIA Chief Economist Harley Dale. This will intensify the nation’s ongoing housing shortage, according to Mr Raine, and create more demand for the limited pool of stock available. Fortunately the Reserve Bank of Australia continued to do its bit for home owners, with its decision to leave official cash rate at 4.75% in early April. However, a number of industry experts expect another rate hike before the year is out. HSBC Chief Economist Paul Bloxham, said, “markets currently have less than 25 basis points of tightening priced in this year”, while RateCity CEO Damian Smith says, “it’s likely that the Reserve Bank will lift the rate by at least one 25 basis point rise in 2011.” As a consequence, Mr Smith advises borrowers to use the RBA reprieve to review and improve their financial situation by analysing home loans and credit cards. |
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