New home financing figures released by the Australian Bureau of Statistics earlier this week support early signs the property market is starting to improve. While it’s encouraging to see first home buyers returning to the property market some experts are declaring the market has a long way to go before its current decline is reversed.
The figures released by the ABS indicate the number of dwelling commitments for owner occupied housing by a seasonally adjusted 2.2% with the number of first home buyer commitments as a percentage of total commitments rose to 16%. At the same time last year, first home buyer commitments were at 15.9%.
One of the Country’s most recognised and respected property analysts, Louis Christopher, managing director at independent property advisory SQM Research, says it’s important to consider the total number of buyers rather than the percentage. He says "there are first home buyers in the market, it's only the percentage of the absolute number of buyers. You can see a situation where the total number of buyers is actually falling, even though the proportion increases."
Louis Christopher believes the property market in Australia is still fixed on watching what’s happening in Europe. He says, "I do think it's fair to say that housing finance approvals as a measure of demand have picked up.”
Price data provided by RP Data Australia, providers of real estate property valuation and house prices show the lowest decline in several months. SQM’s own stock on hand data shows the number of new listings remained flat this October. This indicates sellers may be beginning to draw back from the market. On the other hand, the ABS data indicates buyers are returning.
Louis Christopher is very clear when he warns prospective buyers and sellers to be wary. He warns of the need to be wary of what is currently happening overseas. "Things have improved since the middle of this year, and with the interest rate cut, that is only going to be more encouraging. If the market blows up in Europe, there are going to be huge problems for our banks and then any recovery will be off."
Experts anticipate housing demand will remain low while the number of properties to appear on the market is expected to increase. As we approach the end of the year, prices are expected to remain flat or fall.
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