RP Data has a useful note out confirming the conventional wisdom that early Spring and late Summer are the two quarters of highest property price growth and duly expects the current flush of growth to ease:
Mr Kusher noted that the high seasonal nature of the market suggests that the 2.8 per cent value growth recorded over the first quarter of 2013 is unlikely to be maintained throughout the remainder of the year.
“If the growth rate continued at this level for the remainder of the calendar year, it would represent a rise in capital city dwelling values of 11.2 per cent. However, if history is anything to go by, this rate is unlikely to continue.”
“It’s important to remember that Australia’s national housing market is highly seasonal with values seeing a greater level of quarterly growth over the first and third quarters of the year and with growth typically lower over the second and final quarters.
“Between 1996 and 2012, the first quarter recorded the strongest rate of capital appreciation in dwelling values across 10 of the 17 years. In each instance, and where the 1st quarter of the year had not recorded the strongest value growth, it was the 3rd quarter which recorded the greatest value growth. The results highlight the significant impact of seasonality on the change in capital city home values,” Mr Kusher said.
I agree for different reasons. As the year goes on, the chase for yield in property faces a glass ceiling (or soggy foundations) without first home buyers joining the party. As FHB’s trickle back in prices could bounce again by Q3 but only before the economy comes under renewed pressure from falling mining investment and commodity prices.
Rate cuts will of course help as well but I don’t expect any until the second half at this stage. Full report below.
17AprilPropPulseValuesoverquarters2013
