National house prices have seen their first turnaround since the back end of 2010, but this year will be one of “mixed outcomes”, it has been claimed.
The latest Australian Property Monitors house price report shows a marginal national median house price rise during the December quarter to hit $533,521.
Although slight, the increase will come as welcome news to property investors, with APM having previously recording five consecutive quarterly declines.
The rise was driven by activity in the Sydney and Melbourne markets, said APM senior economist Andrew Wilson, with each city showing distinct buying trends.
“The small growth in the national median house prices was due to an increase in buyer activity in the bottom end of the market in Sydney and, by contrast, the top end of the market in Melbourne,” Wilson said.
Some of Sydney’s activity could be put down to first homebuyer sales brought forward to beat the December 31 changes to stamp duty concessions. Nevertheless, Wilson said the result was significant as it signalled an end to the trend of price falls over the last year, adding that there is “the realistic potential for a sustained turnaround in some markets.”
He warned, however, that the market could yield mixed results in 2012, with some capital cities seeing a return to growth and others remaining flat.
The APM results come on the back of the Deloitte Access Economics prediction that 2012 will be another difficult year for housing.
The company’s latest Business Outlook notes that, while interest rate cuts and population growth in many areas of the country could spur some demand, a full recovery in the property market is still some way off.
“The pace of housing construction is going nowhere in a hurry. Indeed, that trend has been evident in leading indicators such as approvals and loans for a while now,” the report said.
Deloitte pointed to lingering effects from 2010’s rate increases, along with fears of falling house prices and development roadblocks, saying activity in the housing market had been “sidelined” by the factors.
There is cause for optimism, however. The company said there had been recent stirrings in demand for housing credit, which had risen to a four-year high. Successive interest rate cuts would also renew appetite for housing, Deloitte predicted. Housing construction could also begin to reawaken in the months ahead.
“Although that gap between the demand for housing and its supply doesn’t imply a surge in construction tomorrow, it does add important upward pressure. So although the next few months will see construction remain under pressure, the long awaited upturn may finally become evident by late in 2012,” the report said.