The performance of the Australian property market has fared well in 2009, based on the RP Data Rismark Monthly Home Value Index report. It also showed that most capital cities saw its property values increasing well above the previous peak. The national property values were 10 percent higher over the first 10 months of 2009.
From another perspective, month-to-month property transactions were relatively subdued. Over the year to October, the monthly sale of properties failed to break the ten-year record of 61,400.
Even with the low transactions compared to the historical average, the market activity has improved from last year as the number of sales bottomed out at 43,000 in August. The monthly sales in 2009 have reached 55,000, with a 2.5 percent increase from August last year.
The relatively low sales is being recorded when demand for property is increasing, due to population growth and improved confidence in the property market. Thus, the question is "why are sales volumes so low?"
The reason comes down to the tight level of the market stock rather that the lack of demand for real estate. Despite the fact that new listings in the market have improved since June, the total stock levels continue to decline, as actual demand outweighs supply.
On the other hand, sales volumes for Christmas season will be closely watched. A result may come out as most buyers remain active during the last week of the year. This time of the year sees an increase in the numbers of property sold as buyers finalize their contract before the Christmas holidays. The same trend is also recorded in the weeks leading to the end of the financial year.
January is the most subdued month and by far, the quietest month in terms of buyers and sellers’ participation in the market. There were no sales recorded in the first week of the year. Life in the property market returns and becomes visible only in the second half of the year.
The output for 2010 with regard to the sales volume is fairly good. Though interest rates are increasing and most of the government’s stimulus packages will be cut, some expect that ‘upgrader’ and investor will continue improving and will provide balance to the prospect of several first-time homebuyers.
Consumer confidence remains high and speculation will rise as unemployment is already peaking, which will give support to the property market. Medium- to long-term growth forecast remains good, providing encouragement to potential buyers. In addition, the housing supply remains low and population growth will likely remain very high, creating an imbalance between demand and supply.