This is an article I read today in the Illawarra Mercury. It made me smile as it has been a while since we have seen these types of articles.
Excuse me for being a pessimist, but I might just wait until I start celebrating the start of the next property cycle (when property prices will start rising again). I think the best that we can hope for at the moment is that the market has stabilised. If so then buyers will come back. I believe that we are getting close to that point now. With interest rate falls and a stabilisation in the stock market, with overall economic conditions are far less erratic than last year, I can see buyers entering the market with enough confidence to take action (purchase).
The real risk in our economy now are further macro-economic events from the world economy. Another Leahman Brothers or , more likely in my view, a geo-political event in any of the developing world, must still be rated as being of significant risk. I have not seen any recent surveys on business confidence, but I would be guessing that it would only have slight improvements so far. I think we need a few more solid month’s under our belt before business confidence can start to rebuild. In the property context, this means less supply of new land, houses and apartments.
I can really see a unique environment developing in the property sector. The low interest rates and first-buyer grants will continue to produce demand for property in this sector. The very poor economic environment world wide, with the resulting poor confidence and lack of readily available finance, will result is significantly reduced supply of new properties. The two obviously don’t sit well together. So the great irony will be that at this stage those developers who do have suitable stock available or in the pipeline, and who have managed to sort their finances, there is probably the potential for price increases in the near future.