In the latest report from BIS Schrapnel, Australia, due to its strong population growth and housing demand will continue to show strength in the face of the global financial crisis. Meanwhile our overseas counterparts are suffering a domino-effect econonomic downturn.

“The US, UK and parts of Europe and Japan are being caught with over-investment, a collapse in property prices and bank balancesheets, problems of bank insolvency and weakening construction, which will mean periods of declining growth for these regions."

With Rudd's fiscal stimulus package and continued population growth, demand for property will likely strengthen over the next 3 years.
BIS Schrapnel, Australia's leading forecaster agrees.

 

“...after the current shock, prices and construction will rise, not fall.”

Yes, in the short term we have seen and will continue to see some businesses tightening their belt with layoffs and wage reductions but the health and strength of Australia's economy will prevail.

As we contemplate 2008 and look ahead to 2009 it's hard not to see investors returning to faithful practices that have done them well in the past.
People tend to do more research at the start of an upturn in the market. They're more hesitant to jump in with both feet so they look for signs from experts or by doing their own research on infrastructure and job growth within a radius of the property they're interested in.
In 2009 we'll see certain areas do really well and other areas stagnate so it's important to get the facts straight.
Specific suburbs of cities will do well with new infrastructure as well as proximity to schools and jobs which will mean good rental demand. Southeast Queensland with it's diverse economy will continue to grow in 2009. Coastal towns on the Sunshine Coast and Gold Coast that have had strong rental growth without the corresponding price growth will do particulary well.
In fact as Bernard Salt says in his latest article the towns along the Australian East Coast are hot property in 2009.

As the RBA drops the cash rate a further 100 basis points, first home buyers are seeing opportunities in the property market. Affordability at it's best for years, buyers are cashing in on the government grant and prospects of low payments on their mortgage. Population figures are still rising and with that rental demand creating a windfall for investors as rents increase by 10-20% pa in most cities. We have entered the next property boom - no doubt about it.
All the factors are in place for a strong property market over the next 2-3 years as yields increase and capital growth rises as investors and first home buyers return to take advantage of low interest rates, government grants and good returns.
Many tip the Reserve Bank to lower the cash rate by a further 75 basis points when they next meet in February.

Please download and read the article from RP Data in our free resources section!

The Property Clock has entered a new phase with property analysts confirming we are now on the upswing.
As we have predicted over the past few months, the downturn in the property market was going to be nothing like what the share market experienced. With strong fundamentals underpinning it, sales are starting to increase as demand returns.
Tim Lawless of RP Data-Rismark states, "The Australian property market has moved through the bottom of it's cycle."
We are likely to see fair growth for the first half of 2009 before double digit growth returns later in the year and into 2010.

To ensure the property market stays strong, the government has put in place some radical changes for 1st home buyers by increasing the grant by up to 300%.

1st home owners are a small part of the total property market and so we may think that the increased grant won’t affect things much. There are two reasons why this will have a significant impact on the Australian property market.

1. Overall confidence for investors because of rising demand.
2. The new grant is split into two parts. If you’re buying a second-hand home you will receive $14,000 dollars. But if you purchase a new home the government will give you $21,000.

The reason for this is to stimulate the building industry as well as increase supply. The result will be an increased demand for land and house & land packages.

Our clients who have land holdings in and around the southeast of Queensland and especially house & land packages should see an increase in demand over the next few months and into 2009.

The Housing Industry Authority states on their website, “The increase in FHOG has invigorated confidence in the industry and lifted the spirits of many aspiring first home buyers looking at purchasing a new dwelling. Already, builders are reporting an increase in inquiry levels. “