Spring has sprung - but will it deliver the bounce in the property market the industry needs? We speak to Dr Tony Hayek of Blue Wealth Property and Dr Andrew Wilson of Australian Property Monitors for their thoughts on how this Spring season is likely to play out.
Video transcript below:
Donna Sawyer, Australian Broker TV
Donna Sawyer: Spring has sprung, but will it deliver the bounce in the property market the industry needs? Well that depends on who you ask. Dr. Andrew Wilson of Australian Property Monitors says all signs point to a good season ahead.
Andrew Wilson, Australian Property Monitors
Andrew Wilson: Well certainly most Australian capital cities are set for probably their best spring in years, following a solid winter performance for most capital city markets, confidence is building in buyers and the fundamentals are strengthening too, to see certainly a much better outcome than we got a year ago.
Donna Sawyer: Dr. Tony Hayek of Blue Wealth Property says the market outlook is mixed depending on what area you are in.
Tony Hayek, Blue Wealth Property
Tony Hayek: I think in this sentimental market that we are currently in, I think some of the traditional don’t quite apply like they used to. I think you will find that some of the markets like Sydney, some of the sort of more undersupplied markets will probably do okay. I think Melbourne is still in quite a bit of trouble. I think that will struggle and it will struggle for a few years, I don’t think spring is going to help it. I think it’s going to require a few springs. So you know now more than ever there is sort market segmentation. So different markets that would perform differently through the spring.
Donna Sawyer: So what should brokers be telling their clients about the state of the property market and when to expect a return to the growth phase in the cycle?
Tony Hayek: I think there is a very fine line there, it’s important that people don’t go past their own expertise. So although brokers are diversifying their expertise is selling broking and they should get their other expertise from experts in that area, which obviously our clients do. They get their property expertise from our research analysts, but I think it’s fair to say that it’s a safe statement to make for clients that we are in a relatively flat market and we are certainly not going to see in the next couple of years extraordinary amounts of growth or a massive increase in capital growth anywhere. What we will see is some stability, we will see probably some consolidation in some markets and what we are seeing already and what we will continue to see is a very strong rental market with low vacancies and high yields. And of course from a broker’s perspective the biggest influence they can have on their clients is finance.
Andrew Wilson: I think we are seeing expectations from investors, created from investors, out loan numbers from the ABS are showing an increase in investor loans in New South Wales, Victoria and Queensland at a rate higher than a year ago. But I think that the expectations are from investors that we’ve reached the bottom of the price cycle and that it is a good time to enter the market and that we will start seeing capital gains over the next 12 to 18 months in most markets.
Donna Sawyer: This is Donna Sawyer reporting for Australian Broker TV.