SQM turns bullish on house prices

Find below the press release for SQM’s new bullish house price predictions for the next eighteen month. They are certainly more sober than the reporting at the AFR suggests. A firming in house prices over the next 6-9 months is quite possible, based on the same condition you will see in SQM’s chart, that the terms of trade do not fall further, but interest rates do, which is my base case. And if it happens, you can be certain that bullish rhetoric will reach fever pitch.

In my view, however, the fall in the terms of trade is structural, and will resume after being nursed through the Chinese leadership transition (unless they change their minds and plant the stimulus foot). That means that beyond mid next year, the prospects for local assets is troubling. I would equate this view with The Prince’s take on the current stock market. Sure you can have cyclical rallies but the structural trend is a bear market…

Christopher’s Housing Boom and Bust Report 2012/2013

The housing market is about to enter in to an imminent recovery phase, according to the latest annual release of Christopher’s Housing Boom and Bust Report.

SQM Research has released Christopher’s Housing Boom and Bust Report for 2012/2013 today! The document details Louis Christopher’s (SQM Research’s Managing Director and respected property analyst) assessment of the current property market on a national scale and his future predictions concerning the direction that Australian real estate will take in the near future.

Mr Christopher, who is renowned for his candid, impartial approach to the Australian property market as well as his past correct predictions concerning the housing market, has outlined his personal forecasts in this report along with information regarding capital city forecasts. He has also included the company’s past forecasts along with commentary – an element which he believes to be essential to any analyst with integrity. Christopher feels quite strongly about being accountable for previous forecasts as it is his belief that it is something many analysts in the industry shy away from.

Entailed below is the SQM Research base case forecast for the remainder of 2012 and 2013. Other forecasts and scenarios are detailed within the report itself.

SQM Research predicts outperformance for Darwin, Sydney and Perth with the average capital city gain in 2013 to be between +4% – +7%.

Speaking of the report, Louis Christopher says “The housing downturn that commenced in 2010 for most capital cities has just about run its course. Interest rate cuts appear to be creating a bottom in the housing market and the prospect of more rate cuts will likely create a rise in dwelling prices for the remainder of this year and into 2013. The rate of recovery is going to vary from city to city but all cities should positively respond to the rate cuts. 
We are also forecasting that the significant downturn in the certain holiday locations around the country such as the Gold Coast and the Sunshine Coast is also coming to its end. Never the less, the recovery is not likely to be particularly strong for the first year as there is still an excess of listings on the market that need to be absorbed first and that is going to take some time to happen.”