A look back on how the market performed in 2011
The real estate market will be drawing a sigh of relief as the year comes to an end.
As we take a look back on how the market went in 2011, we saw an overall improvement of up to 10 % — a heavy drop for the real estate market but a small part of the sharemarket correction of 2008.
As we peek into the crystal ball and think what 2012 waiting for home owners and real estate investors, there are a few signals that propose we are entering calmer surf.
With Europe in scandal and crisis, the USA economy frail and China slowing, interest rates are on a downward spiral. Experts anticipate the Reserve Bank od austrila will cut rates down continually over 2012. There could be a reduction of up to 100 basis points throughout 2012.
Falling interest rates immediately increase affordability and attract buyers back to the real estate market. Home buyers jumped in with both feet in 2001 and 2009 largely due to dropping interest rates. The main change in 2013 market probably won’t come with increased first home buyer grants.
Real estate is a great Australian pastime and this goes on to be the case.
Web data shows that, despite competition for property was low in 2011, web browsing endures to be very high. Online data analysis of real estate websites proposes more than 3 million Australians look for real estate each month. That would mean around 15 per cent of the population is proactively looking at real estate at any onetime.
This very high activity flows on to the physical market, with many real estate agents seeing high numbers of buyers at inspections for quality homes. Even though the level of interest are many people, that believe 2011 has not been the ideal time to buy.
First home buyers and investors have sat on the fence of the property market. The consequence is a major increased demand for rental real estate and a lowering of supply of leasing properties. As a fallout, we are will see rental yields lift in 2013.
According to the Reserve Bank of Australia, household savings are at their highest levels since the 1980s. They have been creeping up since the middle –2000s, hitting the top at 10.5% of disposable income in the June quarter.
Many mortgage have been making substantial extra principal repayments in the last couple of years and this will add to their equity and cash flow positions.
For many buyers, as money begins to burn a hole in our pockets. People who have been avid savers and have a stable job — which is 95% of the population — will start to figure out it’s not the end of the world and will begin to buy again.
The real estate market is cyclical and often the biggest period of growth comes straight after the biggest drops.
I think when we all look back into 2012 in years later these factors will likely result in a rebound in median property values, and the market will come full circle back to where we started before 2011 drop.
About Jhai Mitchell
Jhai is an award winning Internet Marketing Real Estate Agent for Elders Toongabbie and Kings Langley. After running his own internet marketing business he has now set his own sites for the real estate industry. He observed that 90% of real estate agents did not know how to market themselves online. Jhai is now fixed on one goal. To teach real estate agents that they can market online so much better than they currently are.
Since then he has been consistently quoted in the Sydney Morning Herald and Real Estate Business online. He is a regular guest blogger on TheHomePage.com.au, sharing his expertise of marketing aspects for the Real Estate Industry. His biggest passions are his wife, martial arts, dogs and most of all property.