It is beginning to feel eerily like 2008 in Queensland. In case you were asleep back then this is what was occurring in the land of real estate.
Average house price values have fallen for the first time in 17 months as interest rate hikes begin to bite. Prices across the nation’s capital cities fell 0.7 per cent, latest research from RP Data shows.
But experts say there is unlikely to be a significant downturn – as constantly predicted by a range of overseas experts – because of a national housing shortage. In the three months to June, all capital cities experienced virtually no growth or a fall in values, with the exception of Adelaide.
Most of that article could be re-published today with revised dates and I doubt anyone would even notice, except for this one little point.
Mr Lawless said with pre-listing activity slowing down, buyers could expect fewer properties entering the market. “We may see further declines, we may see some further increases, but it’s essentially going to be a flat market going forward,” he said.
Yes the “flat” story is the same, but the listing activity is definitely not slowing down this time which suggests the dynamic is at least a little different. However, just like today there was a rolling discussion about what would or wouldn’t occur to prices which was ended later in the year with the introduction of the first home buyer’s grant boost sending the bears back into their caves for another 18 months.
Yesterday I was discussing with a friend that the only thing missing from the media was the HIA complaining that they didn’t have enough houses to build. Then today I noted.
New home sales rose slightly in February but growth remained weak, as the pace of the housing market slowed.
The Housing Industry Association – JELD-WEN new home sales report rose 0.6 per cent in February, following a 2.5 per cent rise in February. House sales rose 1.5 per cent in the month, while apartment, units and townhouses dropped by 7.6 per cent in the month.
“New home sales are running at volumes considerably below those experienced during the stimulus-driven run of 2009 and early 2010, while both local government building approvals and new housing loan approvals are trending down once more,” HIA chief economist Harley Dale.
Although the federal stimulus boost ended more than a year ago, other signs of weakness in Australia’s housing market have surfaced. Auction clearance rates in Sydney and Melbourne have hovered in the area of 60 per cent in recent weeks, compared to highs of 80 per cent seen last year.
Australia’s high house prices have also prevented would-be first time buyers from entering the market, while slowing the creation of new stock needed to relieve the nation’s undersupply of affordable dwellings, some commentators say.
“At the very time when new home conditions need to be continually improving we are faced with compelling evidence of a considerably weaker 2011 compared to last year,” said Dr Dale.
New house sales in New South Wales rose 0.9 per cent in February and 2.9 per cent in Victoria. In flood-hit Queensland, they dropped 13.3 per cent. They also fell 4.3 per cent in South Australia and 2.2 per cent in Western Australia.
Once again Queensland takes the wooden spoon.
I have made it very clear that I think that the housing market is in trouble across the country for various reasons, but in my opinion Queensland is reaching an inflection point. At this time I simply cannot see anything apart from direct government intervention stopping Queensland from seeing some significant falls in house prices. Obviously my analysis may be off, but due to it I find myself constantly on the lookout for any evidence that some form of government intervention is on the way.