Economy

Auctions strong as first-time buyers spend big for last-minute grants

Patrick Stafford /

The auctions market has ended the financial year on a solid note, with first-home buyers rushing to take advantage of federal and state-based grants before they are downgraded.

But one expert says the next financial year may not differ so much from the last, in that investors and buyers should expect a slow, drawn-out recovery rather than any short, frantic bursts of improvement.

“We’re not expecting any major recovery for the Melbourne market,” SQM Research managing director Louis Christopher told SmartCompany this morning.

As for the rest of the country, Christopher’s opinion was unwavering – most capital cities will perform over the next 12 months as they have in the past year, assuming interest rates and the dollar remain relatively stable.

“We’re still expecting any recovery to be modest and moderate,” he says.

According to the Real Estate Industry of Victoria, Melbourne recorded a clearance rate of 73%, compared to 69% last weekend and 55% during this weekend last year.

“The slight increase in the clearance rate this week may be due to the first-home owners grant for established dwellings coming to an end on the 30th, June 2013,” chief executive Enzo Raimondo said in a statement.

Various changes are being made to state-based first home owners’ grants, including in Victoria and Queensland.

Such changes mean the first home owners’ market is likely to taper off over the next few months, Christopher says.

“Melbourne is likely to track Sydney’s changes in that regard, meaning there was a drop off in first-home buying over the few months after those changes came into effect.

“There was also a slow and gradual build up after that period.”

As for the rest of the year, Christopher says there isn’t much reason to expect anything other than what we’ve seen in 2012-13. Melbourne is tipped to record 2-5% capital growth during this calendar year, while Sydney “is the market we’re most bullish about”.

“We’re seeing fairly strong pricing action now,” he says, with more expected in the next few months.

Canberra, however, is expected to remain under pressure, while Christopher says Brisbane is simply “treading water”.

“There is no major recovery with lots of stock in the market…and that’s likely to continue in the remaining half of the year.”

 

 

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Patrick Stafford

Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.

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