“The economic factors tracked by rpdata seem to suggest that there has been a delayed response to the on-going cuts to interest rates over the past 18 months or so. The number of house and unit transactions in 2012 was estimated by rpdata to be lower than the five year average. And although values have continued to decline on an annual basis, the rate of decline has slowed, with values increasing by 1.8% between May and December 2012. Early data for 2013 has seen dwelling values, based on the combined capital cities index, move into positive territory on a rolling annual basis.”
Furthermore, auction clearance rates rose steadily throughout 2012, while the levels of vendor discounting and average time on market have trended lower over the second half of the year. Since September, 2012, the proportion of homes selling at a loss has eased, according rpdata, while a rise in the proportion of homes selling for more than double their initial purchase price has been evident.
Rpdata says first home buyers have returned to the housing market, although current numbers are ‘well below’ the ten year average - and half their historic peak.
“This was in the 12 months to November 2009, after many incentives were introduced. The number of buyers returning to the market increased by 3.5% over the year, while refinance commitments were up by 6.4%.”
This was indicative of competition among lenders after exit fees were abolished in July 2011, says the research group, with borrowers shopping around for lower mortgage rates.
“Investment activity in the housing market may continue to improve over the coming year on the back of a number of factors namely: recent falls in home values, lower mortgage rates, rising rental rates in certain areas, the subsequent improvement in rental returns and the recent improvement in equities markets.”