VICTORIA OUTLOOK MARKET CONDITIONS In the latter half of 2011, consumer confidence fell but it is anticipated to improve in the first 6 months of 2012 as a result of interest rates falling, the global economy strengthening and affordability improving. Victorian members said the market would steady, although a minority said they thought it would still fall. Survey responses indicate gradually improving buyer confidence is expected to be the result of lower interest rates and increased home affordability. These will be the key influencing factors on the market in 2012.
RESIDENTIAL MARKET Property Prices Victoria’s property prices are expected to remain relatively flat across all sectors, with some potential downward trends: House prices – Downward movements, in the main, are expected to be kept below 5 per cent. Apartment/strata prices – The subdued market would be as a result of oversupply and low demand. Land prices – In the main, price movements would be below 5 per cent as new subdivision releases ease the supply situation in some areas. Where supply is still short, price increases are being experienced, but these should level out in 2012.
Rental Market Vacancy rates are a bit of a mixed bag with 38 per cent of Victoria respondents saying they would trend upwards, easing by up to 5 per cent in the main; 25 per cent said they would trend downwards by 5 per cent; and 37 per cent saying they would remain flat. As affordability improves, more people are opting to buy in areas where supply is short for good quality rentals. As a result, there is increased competition among renters. In a soft market, people choose to rent rather than sell so while vacancy rates may tighten, the changes will only be marginal. Weekly rents are expected to head upwards or remain flat.
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FIRST NATIONAL REAL ESTATE 2012 PROPERTY MARKET OUTLOOK