Is housing rebounding?

There's reputed to be a third party in many Australian relationships - the house. Australians are said to be in love with real estate, but post the GFC that relationship has become high maintenance. Now there are signs that things might be about to change with auction clearance rates rising. This week we polled on Queenslanders relationship with residential real estate, and the signs were encouraging for the industry.

We had a good spread of voting intention, but in this case it wouldn't have made much difference to the result. As the table below shows, it doesn't seem to matter too much how you vote, your view of the housing market is going to be positive. 

Thinking about the residential real estate market, how strongly would you agree or disagree that now is a good time to buy?

Good_time_buy Bob Katter's Australian Party Greens Labor Liberal National Party Total
Strongly agree 12% 22% 22% 19% 20%
Agree 36% 32% 36% 43% 39%
Neither agree nor disagree 20% 24% 20% 19% 20%
Disagree 16% 10% 8% 10% 10%
Strongly disagree 8% 6% 6% 4% 6%
Unsure 8% 6% 6% 4% 5%
Refused 0% 0% 2% 0% 1%
Grand Total 100% 100% 100% 100% 100%
Total agree 48% 54% 58% 62% 59%
Total disagree 24% 16% 14% 15% 16%
Net agree 24% 38% 44% 48% 42%

Across the sample 58% thought it was a good time to buy residential real estate, and only 16% thought it a bad time. The only voting bloc where less than 50% thought it a good time to buy was amongst Katter voters.  There are only 22 Katter voters in this sample, so it might just be a result of sampling error. Or it might reflect the fact that the blue-collar conservative voter is less confident about the economy than others.

The qual shows that it is the decline in house prices to the moment that is driving this optimism. Many respondents think it is a good time to buy because if prices have declined enough, then there is only one way for them to go - up. This is the investment/speculation rationale. However, other themes are also present, including the idea that it is always a good idea to buy real estate because it puts a roof over your head and over time is cheaper than renting.

You can track these ideas in the Leximancer map below.

Good Time to Buy 12 11 01 Thumb

 

Low "prices" are closely associated with low interest "rates", reflecting the fact that for most whether a house is cheap or not depends on whether they can afford mortgage repayments, so price and interest rates have a close relationship.

However, as these representative quotes show, there is still a lot of caution about the market.

Verbatims

First_Pref: cd
Good_time_buy: agree
COLUMN: good_time_buy_why
Prices are low but due to the volatility of the economy esp redundancies, there'll be more people struggling to repay loans, mortgagee in possession, and when people hit the dole when their payouts dry up, it could slide the property market further down. I would be cautious about buying now unless I was certain my job was secure.

First_Pref: ind
Good_time_buy: neither_agree_nor_disagree
COLUMN: good_time_buy_why
Perhaps six months ago, I would have agreed that it was a good time to buy as prices had fallen so significantly, but as more and more people are being laid off from their employment, the risks associated with buying property at the moment are becoming huge. I know all sides of politics at the moment are continually ’talking up the economy’, but out here in ’normal land’, people are either desperate to find employment, or worrying (and noticing) how busy (or how sales are going) at their current place of work.

First_Pref: lnp
Good_time_buy: disagree
COLUMN: good_time_buy_why
For some people, pensioners and those in low-paid jobs, it will never be a good time to buy real estate. We live in a motorhome, with no fixed address but our daughter's and as much as we would love to own property, prices have tripled in the last few years, making it a totally impossible dream.

First_Pref: lnp
Good_time_buy: neither_agree_nor_disagree
COLUMN: good_time_buy_why
I think you have to do your research thoroughly to find the house you want in a suitable suburb. Houses are now shifting in maleny, but only because people finally can sell there houses elsewhere I think there will be more houses come onto the market, if people who have lost their jobs cant afford to pay their mortgage.

First_Pref: alp
Good_time_buy: neither_agree_nor_disagree
COLUMN: good_time_buy_why
While the market in SEQ is a tad soft, I'm not sure the economy is going well enough to be jumping into a long term financial committment over 30 years, without the knowledge that your job is safe. We have seen significiant layoffs, wage freezes and in my field (profressional services), we appear to be going sideways and really only tredding water, as our clients are unsure of what the future holds.

First_Pref: ff
Good_time_buy: agree
COLUMN: good_time_buy_why
On the one hand, there is uncertainity about the future (GFC, Europe, companies going into receivership or to the wall or reducing staff, USA printing money, etc); on the other hand there properties around appreciably lower than they were worth a few years back and incomes have increased & Aus economy seems to have the strength to bounce back against the odds and interest rates have fallen and seem. to be still doing so.

First_Pref: bkap
Good_time_buy: strongly_agree
COLUMN: good_time_buy_why
There are many many "good" properties on the market - lots from people who overcommited themselves, interest rates are low and prices are down following several tough years when property values fell although in some instances properties previuosly were considerably overpriced.

First_Pref: grn
Good_time_buy: neither_agree_nor_disagree
COLUMN: good_time_buy_why
First Home Owners forces prices up, low interest rates forces prices up, the Xmas buying season is starting, forcing prices up and our rates are sky-high to pay for water infrastructure we are not using, so why would it be a good time to buy?

First_Pref: inf
Good_time_buy: agree
COLUMN: good_time_buy_why
The price of real estate in Queensland in maily stagnant and in fact anyone with money can buy good property at prices well below what they were worth a couple of years ago. Bribie Island is an example.

First_Pref: lnp
Good_time_buy: agree
COLUMN: good_time_buy_why
the long term history of real estate shows that prices go through a steady, repeating cycle of steady rises followed by modest falls or stand still plateaus. The present position of the cycle is in the stand still phase and the market is sure to see a rise phase beginning soon and lasting about six years.

First_Pref: alp
Good_time_buy: neither_agree_nor_disagree
COLUMN: good_time_buy_why
Owning property as in a place to live should not be seen as a way of making money, if you need a home and can afford to buy then buy. If investing then it probably is a good time to buy with interest rates low and a big demand for rentals as the housing shortage worsens.

First_Pref: alp
Good_time_buy: agree
COLUMN: good_time_buy_why
Without knowing the future, it would seem that housing prices are a bit flat at the moment, so probably a reasonable time to buy, depending on how much of a mortgage one is prepared to pay back. After the 2008 GFC, things are still pretty dicey.

First_Pref: grn
Good_time_buy: strongly_agree
COLUMN: good_time_buy_why
If you have the money, right now is the perfect time. Prices are just starting to rise again after apparently bottoming out in July. The cost of borrowing is also quite low right now making mortgage repayments significantly lower than rents.

First_Pref: lnp
Good_time_buy: agree
COLUMN: good_time_buy_why
we have just bought a property in Brisbane to help our son and his fiancee get out of the rental market and I found that prices weren't too bad as long as you weren't looking for a mega mansion (all of which remain high priced - AND still on the market) Prices may still go down (a bit or a lot) but whatever happens, we need to be trying to put some confidence back into the property market/new home builds (no,we're not involved. in either sector)

First_Pref: grn
Good_time_buy: neither_agree_nor_disagree
COLUMN: good_time_buy_why
Ab obssession with real estate and prices in unhealthy. You should buy when you need somewhere to live otherwise the whole market is best ignored.

First_Pref: lnp
Good_time_buy: neither_agree_nor_disagree
COLUMN: good_time_buy_why
There are many financial "black swans" on the horizon which may of may not affect house prices and interest rates. It is impossible to say with any accuracy what direction house prices will take or the affordability of householders to maintain a mortgage

First_Pref: lnp
Good_time_buy: strongly_disagree
COLUMN: good_time_buy_why
Unless I expressly had to sell due to work or some other factor, I would not be selling or buying real estate now. The economy is too fragile.

But the truth of the matter is that there is a glut of houses on the market and very few are buying. That's largely due to the fact that there is global instability with falling price commodities and with Europe's fiscal woes , Queensland's woes after Bligh and an inept federal government here in australia.

Things like CGT for the family home or removal of interest deductibility for investment properties. International investment in property has stalled and security in employment make people nervous.

 

 

 

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Comments   

 
+3 #1 RE: Is housing rebounding?Mary 2012-11-05 08:53
The trend today is to build more high rise. Are these to be the ghettos of the future? They are over prieced and thrown up with little thought given ,apart from profit to the eco friendly residence that the future requires
 
 
0 #2 RE: Is housing rebounding?Andre 2012-11-06 07:24
Those with property & debt are more likely going to say it is improving, I would assume.
If you have debt & vested interest in property, which most Australians do (indirectly or directly), then wouldn't you prefer to inspire confidence in your own product.
The industry spruiking, misinformation, propaganda machine & lobby groups are very powerful.
Our own government is spruiking housing by the way it has kept negative gearing, not acted to clean up the industry data reporting & real estate agent shonky practises.
I dont think any government would want Australia's debt bubble & housing bubble bursting on their watch?
If our housing market was taken back to 'a right for all Australians to have a roof over their head' & the speculation & investment aspects were removed from the market, we would all be better off.
Many Australians would prefer to get cash in their pocket at the expense of all future generations .. does this make them right?