Booz
11-07-2009, 06:34 AM
The Australian
Residential clock's big hand on recovery July 11, 2009
IF a survey by Australia's largest apartment selling agent is right, the alarm has been turned off and the property clock is ticking much faster, especially in Sydney and Melbourne.
Colliers International recently surveyed 570 everyday investors and buyers on where they thought the property market stood. The results predictably showed four markets at or near rock bottom, but they also revealed that 64 per cent believed the worst had passed and the market was poised for recovery or already in a recovery phase.
Colliers International's survey method was to put the property market cycle on a clock face with the top of the market being 12 o'clock and the bottom at 6pm.
On that basis, Brisbane and Canberra are sitting right on 6pm, according to those surveyed. Adelaide and Perth are still headed south at 5pm, but Sydney and Melbourne are past the worst at 7pm.
Overall, 30 per cent of respondents thought the market was at 7pm and 22 per cent opted for 8pm. A further 10 per cent believed it was at 9pm, the trigger point for an upswing.
Grant Dearlove, Colliers International's residential managing director, sees good signs for all markets but believes long-suffering Sydney may be the first to flex it residential muscle.
He likens the harbour city to a sleeping giant.
``With the largest population and the greatest imbalance of supply and demand, the only thing holding it back will be infrastructure and available development sites,'' he says.
Dearlove says Sydney and Melbourne are still experiencing population growth and have almost zero rental vacancies, against a backdrop of strong demand.
``Affordability issues have dogged Sydney's market for the past five years, but there is growing confidence house prices have turned.'' In his own words, he thinks Melbourne, now Australia's most affordable city for new homes, is ahead of its time.
``It has picked the right product for the market and has created a precedent for other capitals to follow,'' he says.
``It started its recovery before the other states and is the benchmark for others to follow.''
Brisbane may be at the bottom of the property clock, but Colliers International believes still booming population growth will drive a market in which developers try to meet residential product demand.
On that basis, the agency considers it a good time for investors in the Brisbane market.
It also believes the residential sector will lead a wider property recovery, as it did during the 1990s recession.
Dearlove says there are already some signs of a return to the market by apartment developers after an 18-month absence.
``We are seeing developers who have options over sites exercising those options and seeking development approvals for residential apartment developments where they would have previously contemplated a commercial development,'' he says.
Dearlove says this year and next will be about securing property in areas with lasting appeal and enduring value.
Nevertheless, he urges home buyers and investors to stay focused on the fundamentals of property, which he says have always been affected by the three main factors of population growth, employment and infrastructure. ``It is easy to forget the long-term appreciation associated with real estate, especially when shrouded in negative press and sentiment [that] forces many to focus on the short term rather than the long-term outlook.''
In a time of rising unemployment, it's a big call to say the housing market is past 6 o'oclock, but talking to real buyers sums up a mood hope, or at least relief that Australia seems to be escaping the worst of global financial crisis.
Residential clock's big hand on recovery July 11, 2009
IF a survey by Australia's largest apartment selling agent is right, the alarm has been turned off and the property clock is ticking much faster, especially in Sydney and Melbourne.
Colliers International recently surveyed 570 everyday investors and buyers on where they thought the property market stood. The results predictably showed four markets at or near rock bottom, but they also revealed that 64 per cent believed the worst had passed and the market was poised for recovery or already in a recovery phase.
Colliers International's survey method was to put the property market cycle on a clock face with the top of the market being 12 o'clock and the bottom at 6pm.
On that basis, Brisbane and Canberra are sitting right on 6pm, according to those surveyed. Adelaide and Perth are still headed south at 5pm, but Sydney and Melbourne are past the worst at 7pm.
Overall, 30 per cent of respondents thought the market was at 7pm and 22 per cent opted for 8pm. A further 10 per cent believed it was at 9pm, the trigger point for an upswing.
Grant Dearlove, Colliers International's residential managing director, sees good signs for all markets but believes long-suffering Sydney may be the first to flex it residential muscle.
He likens the harbour city to a sleeping giant.
``With the largest population and the greatest imbalance of supply and demand, the only thing holding it back will be infrastructure and available development sites,'' he says.
Dearlove says Sydney and Melbourne are still experiencing population growth and have almost zero rental vacancies, against a backdrop of strong demand.
``Affordability issues have dogged Sydney's market for the past five years, but there is growing confidence house prices have turned.'' In his own words, he thinks Melbourne, now Australia's most affordable city for new homes, is ahead of its time.
``It has picked the right product for the market and has created a precedent for other capitals to follow,'' he says.
``It started its recovery before the other states and is the benchmark for others to follow.''
Brisbane may be at the bottom of the property clock, but Colliers International believes still booming population growth will drive a market in which developers try to meet residential product demand.
On that basis, the agency considers it a good time for investors in the Brisbane market.
It also believes the residential sector will lead a wider property recovery, as it did during the 1990s recession.
Dearlove says there are already some signs of a return to the market by apartment developers after an 18-month absence.
``We are seeing developers who have options over sites exercising those options and seeking development approvals for residential apartment developments where they would have previously contemplated a commercial development,'' he says.
Dearlove says this year and next will be about securing property in areas with lasting appeal and enduring value.
Nevertheless, he urges home buyers and investors to stay focused on the fundamentals of property, which he says have always been affected by the three main factors of population growth, employment and infrastructure. ``It is easy to forget the long-term appreciation associated with real estate, especially when shrouded in negative press and sentiment [that] forces many to focus on the short term rather than the long-term outlook.''
In a time of rising unemployment, it's a big call to say the housing market is past 6 o'oclock, but talking to real buyers sums up a mood hope, or at least relief that Australia seems to be escaping the worst of global financial crisis.