Australian Property Monitors believes that the Australian property market will return to growth in the second half of the year.
The group's latest Quarterly Housing Report argues that growth is likely to return by mid-year, especially in Sydney. APM believes that, despite the the decline in buyer activity that accelerated during 2010, the fundamentals of the property market remain sound. A strong economy, rising incomes and an ongoing housing shortage are among the key factors that will drvie the recovery.
“2011 will be a year of stabilisation and modest growth for most capital city housing markets, with Sydney in particular expected to lead, particularly in the mid-range and top ends of the market,” APM senior economist Andrew Wilson said.
The predictions follow a flat December quarter, with APM's data recording national growth of 0.7% for houses and a 0.8% fall in unit prices overall. This put growth for the year at a modest 6%.
“The softening of price growth in the December quarter reflects the continued decline in buyer activity throughout 2010, coupled with a high number of properties listed by years-end as vendors attempted to take advantage of previously strong selling conditions,” added Wilson.
Over the last quarter, Hobart and Melbourne showed the most robust growth for houses at 2.6% and 2.1% respectively. UNits, meanwhile, performed best in Darwin, with 15.8% quarter-on-quarter growth for units in the northernmost capital. The biggest price fall for houses was in Perth at -1.5% and in Hobart for units, at -9.6%.
Melbourne led national growth for the year with a 14% increase in house prices and 7% growth for units.
