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APM Spruiking The Brisbane Market Claiming 10% Growth: All Hot Air and Lacking A Well Researched Reasoned Opinion

The Brisbane property market has been the worst performer of the capital  cities in the nation with the median house price taking a tumble of 7 per  cent.

Australian Property Monitors released its annual State of the Market report  this morning, which took stock of the performance of property markets in capital  cities across the nation.

The report found Brisbane house prices took the biggest fall, though next  year is looking very rosy with the potential of double digit growth.

There was a national 4.2 per cent fall in median house prices, but Brisbane  house prices fell 7 per cent to $427,148.

The report pointed the finger at the January floods for the dismal  performance of property prices, but said things were going to pick up in  2012.

“A significant contributing factor however has been the devastating floods  experienced by [Brisbane] in January,” the report said.

“The Brisbane housing market is set to revive in 2012 off the back of the  Queensland resources boom that will gather strength through the year – weather  conditions notwithstanding.

“Dwelling shortages, population increases, rising incomes and the improvement  in confidence as a consequence of the reconstruction program should contribute  to a recovery in buyer activity. “Brisbane has the clear potential of double  digit growth in median house prices over 2012.”

The Brisbane property market is forecast to grow between 5 and 10 per cent  next year, on par with Darwin and Perth.

Sydney and Canberra’s property markets are forecast to grow between 3 and 5  per cent while Melbourne, Hobart and Adelaide have forecast growth of between 0  and 3 per cent.

APM senior economist Andrew Wilson said 2011 had been a pessimistic year in  most housing markets but there should be national growth next year.

“Demand for housing will intensify in 2012, particularly in Sydney, Canberra  and Perth, which will see housing markets reenergised albeit at different levels,” Dr Wilson  said.

“Australia’s economic fundamentals are strong, and are well positioned to  weather any downturn in international markets.

“This, coupled with renewed buyer confidence, will be the key to driving  prices growth in the new year.

“Nationally, median house prices should recover to rise by 3 to 5 per cent  through 2012.”

Australian Property Monitors is owned by Fairfax Media.

Source: Brisbane Times

AREAP Comments:

• Mmmm the resource industry only accounts for 2.4% of employment in QLD according to Moody’s Investor Services
• The Brisbane housing market is set to revive in 2012 off the back of the  Queensland resources boom?  In 2011 mineral prices were increasing and property  prices were decreasing.   Now mineral prices are decreasing and we expect property  prices to increase? Not likely.
• Now QLD’s tourism-dependent Gold Coast region not only has Australia’s third worst mortgage performance with 3.11% delinquencies, but also contributes the most delinquent loans outright with 6.9% of such loans in Australia located in the region.
• Check out this article Australian Mortgage Delinquencies Increasing Despite Mining Boom, Regions Performing Very Poorly Increases Fourfold: Moody’s Investor Services
• Now lets get down to some basic drivers of property growth
• Supply of listed property is at an all time high
• Demand for property from buyers is at an all time low
• The Eurozone crisis is deepening and will affect credit availability in 2012
• This will reduce buyer numbers in the Australian market
• China’s economy is cooling and their property bubble has burst
• The number of Foreign Investors from China will reduce
• Consumer buying sentiment is poor despite 2 interest rate cuts  in 2011
• Baby boomers are retiring in record numbers, which is reducing home buyer demand.
• Check out this post Find the worst postcodes in Queensland for home loan delinquencies
• APM state “dwelling shortages, population increases, rising incomes and the improvement  in confidence as a consequence of the reconstruction program should contribute  to a recovery in buyer activity”.
• Anthony Street,  Institute of Actuaries Australia fellow and former Macquarie real estate securities funds manager states there isn’t an undersupply of housing in Australia
• Prominent real estate writer and author Terry Ryder supports this position with don’t believe real estate hype on property shortages
• The Australian Bureau of Statistics (ABS) Population Projections, Australia, 2006 to 2101 indicates steady population growth.  But what it does not reflect is the demand for residential housing versus aged care accomodation in the future.
• From 2022 onwards 1.37m baby boomers will start moving from residential accomodation into aged care accomodation.  As a result housing supply will increase significantly and housing demand will not match the supply.  House prices are likely to fall.
• Aug 2011 figures show that real (inflation adjusted) weekly disposable household income actually fell slightly over the past two years, dropping from $859 a week in 2007/08 to $848 a week in 2009/10.  The result marks the first time in 14 years that household disposable income has fallen.
• Consumer confidence has not risen in Australia
• Dear Dr Andrew Wilson thank you for your opinion, but what factors and drivers of growth do you base your argument on?
• Why will prices increase?
• What is your rationale?
• Buyer beware.

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