Property Looking Good For 2009

Paul Taylor, Principal from Taylor’s First National Real Estate is optimistic the South Australian and Australian Property Markets have turned a corner and will bounce back in 2009, with the charge being lead by first home buyers and investors.

“Many of our agents are already reporting increased activity and enquiries from first home buyers and investors, with some posting record sales during the months of December and January,” Paul said.

“This is a result of a number of factors, including improved housing affordability and house prices coming into line with market expectations and growing consumer confidence due to the introduction of a range of federal and state government initiatives.”

Paul said while the lower end of the Australian market was already rallying, the same could not be said for the top end of the market, which he expects will fare worse in the coming months.

In South Australia, with large scale mining expansion on the horizon, limited land release, the increase to the First Home Owners’ Grant, steady immigration and a high demand for rental property, the market should withstand a slow down.

For the national property market, the predictions are for median house prices to fall anywhere from 0.5 per cent up to 40 per cent (although only a few analysts believe it will get as high as 40 per cent).  But the consensus is that it will be at the top end, rather than the lower end of the market that the pinch will come.

What should be remembered is that in the long term, Australian property owners remain well ahead – no postcode has yet shown a negative 10-year return.

 “Over the next five years, rental yields will move to being almost on par with home loan interest rates, making the incentive for investing in property even stronger,” Paul said.

The current average national yield is 5.5 per cent), the figure usually required to entice people to invest in property.  The latest available statistic (September 30 2008) shows the national yield was at 5.05 per cent for units and 4.6 per cent for houses.

“As well as great potential for the commercial sector, rental markets will be one of the key drivers of improvement in residential markets in 2009,” Paul said.