In the first instalment of a three-part series, we have asked some of our top brokers from around the country in January 2012 their predictions for 2012 with regards to the interest rates and the property market in their local areas.
I believe rates will continue to decline as business activity slows in the non-mining sectors.
In the Perth metro area we should see higher activity in the sub-$500k markets. Rent is very expensive in Perth and the cost of renting versus buying is getting very comparable in this price range.
All metro property markets are like patchwork quilts – sometimes with suburbs on either side of the same arterial road behaving quite differently to each other.
In my view, Perth property prices will see general improvements as housing shortages become more acute. As many of the incoming migrants (50,000 into Perth during the last statistical year) are arriving to work in the high income mining industries we can expect the price trend up to affect properties in the $450-700k range as well as the first buyer traditional market.
This year has started very well with larger numbers of first buyers seeking advice as to how they can get out of the rental rat race.
Kate Barnes, owner of Aussie West Lakes
In the West Lakes local area, interest in the market has certainly increased of late. We are seeing the first home owners come back into the market and with the two recent rate cuts, we are seeing people revisit their options in upgrading current properties. We have also been strong in refinancing away from the four major banks to some of the smaller and second tier lenders.
Locally we have the Australian Submarine Corporation and with the release of the new destroyer contracts has increased strong demand for housing locally. We have also noticed locally that the small developers have recommenced housing construction, which has been dormant over the last 12-18 months.
Further interest rate cuts as predicted for the next two months will only invigorate the market further, but I have noticed that people are very selective and careful about their purchases.
Dick Grant, owner of Aussie Darwin
The economy in Australia continues to outperform most other western economy’s due to the robust nature of our mining industry. While things do look very promising in the resource sector, the majority of Australians are showing caution and restraint. Our retail figures are as bad as they could be, and property buyers are still not taking advantage of the many bargain opportunities out there.
All governments are looking at Europe and how they are handling the various debt crisis in the area, governments there have seriously over borrowed and things have reached the point of no return. How they handle the next 12 months will have serious repercussions all over the world and Australia will be affected if things go badly.
Our cash rate will be affected, interest rates should continue to stay low and possibly even dip a little more, if things don’t improve in Europe dramatically. In saying that, the areas in Australia that are enjoying the benefits of our mining boom will prosper.
Some areas in Australia are benefiting from our mining boom more than others, and the Northern Territory is definitely in the right place at the right time. The Inpex announcement has just been made and is huge news for the N.T. The Japanese company Ichthys will be investing 33 billion dollars in the massive gas development, and it could the tip of the ice, other companies will follow, and more massive investments will be made in the region.
Other mining projects are also on the horizon, our “rare earth” deposits have the Chinese looking at our region and more will come of it.
The N.T’s. population is tipped to double over the next 30 years, and there is a real buzz in the air, iconic local company Paspaley Pearls has committed to funding an 84 million dollar “green” office tower in the heart of Darwin to be completed by 2015. There is a lot to be excited about at the moment.
Property values are expected to rise over the next 12 months, especially in the top end, many investors have been waiting until the Inpex announcement, and already real estate agents have noticed a sharp increase in interest already. The next 5 years may be the best ever in the history of the economy of the Northern Territory, handled correctly, property values will rise accordingly.