Simultaneous property reports offer conflicting results

by Mackenzie McCarty21 May 2013

The Gold Coast property market appears to be emitting mixed signals, as industry group reports produce simultaneous – and basically opposite - results.

According to the Raine & Horne property group, strong demand and lower lending rates have brought traction to residential sales in the region, with multiple local offices reporting confidence is up by 60%.

Raine & Horne CEO, Angus Raine, says economic conditions are ‘just right’ for many buyers and investors to capitalise on the region’s undervalued residential property.

“After a quiet period in consumer confidence, favourable winds are once again inflating the sails of the Gold Coast’s residential property market.”

However, while they agree that house prices have remained low, the Real Estate Institute of Queensland (REIQ) March median house price report shows little sign of a major upswing, with the group’s CEO, Anton Kardash, admitting he’s concerned by the lack of first home buyer activity.

Brisbane's median house price dropped by 1% for the March quarter, to $515,000, up just 1% on the same time last year.

REIQ says that, during March, the number of first homebuyers taking out loans in Queensland was roughly half what it was at the same time last year.

Kardash told News Ltd that the latest figures reveal a ‘stable and steady’ market.

"We are calling it steady as she goes - it is not a bad set of numbers, we would have liked it to have been better…If we can get first homebuyers energised we might start to see activity."

But Raine & Horne offices are reporting a ‘substantial’ rise in open home attendance numbers and Raine believes the RBA’s decision to lower the official cash rate to 2.75% will encourage further confidence in Queensland property.

“Most of the big banks have passed on the rate cut in full and Raine & Horne is already registering a rebound in optimism as Queensland buyers take advantage of the low rates to secure a home.”

COMMENTS

  • by Papery 21/05/2013 9:05:35 AM

    Nobody ever talks the market up (prematurely) now, do they?

  • by Peter 21/05/2013 3:42:53 PM

    They just do not want to recognise that the record low IR of 2.75% means squat to first home buyers. What is much more important is the monthly repayments they are looking at on a median priced house ($515,000) after factoring in a medium term future of lower salary increases and reduced job security.

    Industry keeps referring to 'undervalued residential property'... but undervalued compared to what? If the next generation decide that owning they're own home isn't worth it (or indeed possible), then I would say that residential property will be quite overvalued. People may say that will never happen, but massively high house prices will quickly bring that mindset about as a permanent feature. Just look at Switzerland (ownership rate of around 34%), could easily see a nation of renters in a generation here too.

  • by Matt 22/05/2013 7:46:24 AM

    The author of this article has made a tenuous link between the sources used.
    I've read the Raine and horne release and while it does talk the market up, it only talks about the Mermaid Beach and Surfers Paradise markets, not the whole of QLD. These markets are not really the first home buyer markets that Kardash from the REIQ is talking about. They are different price brackets completely.
    Plus, the REIQ itself says that Gold Coast prices increased for the 2nd quarter in a row by 2.2 per cent over March - an omission left out by the author. I'd like to think there is evidence that the market is moving forward in pockets around QLD and the GC would be one of them.