NSW precarious property market rebound expected after bottoming out: First National
The NSW property market is expected to rebound in 2013 due to buyer confidence gradually returning, after it reportedly reaches the bottom of the property cycle, according to the First National 2013 property market outlook.
The improvement will come as a result of buyer confidence gradually returning, affordability improving and ongoing supply charges.
“Just over three-quarters of NSW First National members say that the market has bottomed or will do so in the coming six months,” says Mark Millington, First National's NSW chairman.
Millington is also the principal of First National Real Estate Lakeshores in Mannering Park.
However Millington warns that "while the market is on the rebound, it is considered to be precarious, subject to the slightest negative action or sentiment”.
Millington says that the soft market is mainly a result of consumer confidence and some buyers believe it will fall further as a result of ongoing uncertainty and job insecurity.
Key influencing factors that will affect the property market include the current housing shortage, affordability, new land releases and reducing interest rates.
“The NSW government has to release more land and lower head work costs to cement the recovery and ensure it takes root,” says Millington.
“The state government’s lack of funds to complete any major infrastructure work is restricting the amount of land available.”
The average number of days a property is on the market is expected to hold at current levels or fall.
Sales activity is expected to increase along with property listings, but property prices are expected to remain flat or increase.
Improved affordability and better buying conditions are expected to underpin home buying activity growth in 2013.
“More stock is coming onto the market and turnover is getting faster, indicating there is strong market activity on the way for 2013,” says Millington.
The most active sector of the market in 2013 is forecast to be at entry level.
The Mark at Sydney's Central Park
Now, all signs point south for this market. A year ago vacancies were near zero but today they’re approaching 5%. Price growth has stopped and, according to Australian Property Monitors’ price graph, has started to dip below the red line.