The property industry is gearing up for a good year in 2013 after experiencing some solid growth in 2012, experts predict.
But an uncertain economic climate and the political upheaval of a federal election are set to dampen the industry’s recovery.
“There is nothing more inclined to reduce property activity than an election,” Australian Property Monitors economist Andrew Wilson told SmartCompany this morning.
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The auctions market recorded another solid weekend of results, with Melbourne coming in at 60%, compared to 59% last weekend and 53% for the same weekend last year. The result is a testament to the strength of clearance rates in 2012, which have steadily improved.
The Real Estate Institute of Victoria said in a statement the year will finish with an overall clearance rate of 61%, two points higher than 2011.
Sydney recorded a rate of 61.7% this past weekend, up from 48.7% last year.
With the year coming to an end, economists are looking to 2013 with hope the market can continue its recovery. And while there is reason to believe it can, with interest rates now at their lowest point in years, Wilson says an election may be a setback.
“Come March, when Parliament returns, there’s going to be a lot of focus on the campaign. The government is committed to a budget surplus, and with falling tax receipts that means they’ll be in favour of more cutting.”
All of this will weigh on the property market, Wilson says, which could result in a mixed and patchy result in an otherwise positive economic environment.
However, SQM Research managing director Louis Christopher says while the outlook for property does depend on economic movement, particularly with interest rates, there are signs buyer activity is on the rise.
There is also no reason to suggest it may not continue when sales pick up in February, he says.
“End of year clearance rates tend to dip because obviously demand falls before Christmas and we’ve seen a bit of that this year.”
“But I think the activity we’re seeing will continue in the new year; the new season which generally starts on the first weekend after Australia Day. I think we’ll see increases in auction clearance rates then.”
Christopher says while it’s fairly easy to predict that clearance rates will increase at the beginning of the year, due to the summer break, he says it’s likely the rates in early 2013 will be higher than in 2012.