Crucial crossroads for housing market
By
Adam Smith
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1/09/2011 4:00:00 AM
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The housing market is at a "crucial inflexion point", an economist has claimed.
Rismark managing director Christopher Joye has said talk of RBA rate cuts could tip house prices back toward capital gain. Joye said borrowers had already seen "de facto rate cuts" as lenders moved to slash fixed rates.
"If rates do remain on hold or begin to fall, we would expect to see Australia's housing market find a base and begin to generate capital gains again," he commented.
However, Joye said rate cuts by the RBA would be "surprising" given high inflationary figures over the last six months.
The comments come after figures from RP Data and Rismark indicated a 2.4% decline in capital city median prices over the quarter, representing a 2.9% year-on-year fall.
RP Data research director Tim Lawless indicated the premium housing market has seen the largest decline in values.
"Dwelling values across the most expensive capital city suburbs are down 6.2% over the first seven months of the year. This compares with a much smaller 2.3% fall across middle priced suburbs and a 2.1% decline in the cheapest suburbs," he said.
Lawless attributed decline in the higher end of the market to weak business conditions outside the resources sector, and said financial market volatility was being more keenly felt in wealthier households.
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