The Australian housing market has been looking positive from the perspective of price growth, but nagging problems persist, according to Residex founder John Edwards.
Edwards pointed out that housing markets are growing Australia-wide and the trend is moving in an upward direction, but said, despite this, sales volumes remain low – an issue with potentially deep ramifications.
“Sales in January to February 2013 were the lowest seen on an Australia-wide basis since 1999… [and] it is volumes that drive wealth generation and the economy,” he said.
Without strong sales volumes, Edwards added, property professionals such as mortgage brokers, real estate agents, lenders, and even goods and services industries supporting home improvements suffer.
Such conditions do little to improve consumer sentiment – one of the vital ingredients needed for housing markets to experience sustained growth.
Furthermore, Edwards said, housing needs to become more affordable for growth in capital values to become ‘significant’.
“Overall, there is every indication that the market is improving but it has some way to go. If you are currently intending to invest or buy a new home, now is the time to start looking as downside risks are reduced.”
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