Market fundamentals are beginning to point toward an improvement in residential housing, but any recovery will be patchwork.
BIS Shrapnel's Residential Property Prospects 2012-2015 report has claimed that market conditions are an the way up, and that housing could see a recovery after two years of price declines. But the researcher said improvement would not be uniform, with NSW, WA, Queensland and the Northern Territory recovering while non-resourece states would continue to lag.
Victoria, SA, Tasmania and the ACT may see the residential market continue to falter. BIS Shrapnel said these areas saw the strongest surge in construction following the GFC, and now faced excess supply coupled with underperforming economies.
Nevertheless, states forecast to see market conditions improve can expect conditions to turn around by next year, BIS senior manager Angie Zigomanis said.
"The recovery is expected to eventually gain traction through 2013 as continued growth in resource investment spending eventually flows through to other sectors of the economy. With the local economic and employment outlook becoming more positive, and some stabilisation and improvement overseas, purchasers are forecast to wade back into the market in greater numbers, translating to greater sales volumes and a pickup in price growth over 2013/14 and into 2014/15," Zigomanis said.
Zigomanis predicted that factors such as a return in first homebuyer demand, increasing affordability and a surge in overseas migrants could underpin this recovery. At the moment, however, he said recovery was being stymied by pessimism over the global and domestic economy.
"While overseas economic conditions are expected to remain challenging, improving local economic conditions should move to the forefront of people’s minds and begin to have a more substantial impact on purchaser sentiment,” he said.