Queensland property prices tipped to stay depressed until mid-2011

• by Michelle Hele From: The Courier-Mail  January 01, 2011 12:00AM

 

 

A NEW year will not necessarily bring renewed confidence to the southeast Queensland property market, with predictions it will struggle for at least another six months.

Economic forecaster BIS Shrapnel expects little price growth even if turnover increases.
Senior project manager Angie Zigomanis said that while other states had seen a pick-up this year, Queensland's market was still very weak. "The Queensland market collapsed a little later than other states, so it was natural it would take longer to bounce back," he said. Property analyst Michael Matusik believes there is no end in sight for Queensland's property market slump, which is stuck in a buyer's market.
He predicts sales will decline, properties will take longer to sell, there will be little or no price growth, and there will be slight falls in value during the year.

Mr Zigomanis said most markets were artificially inflated during 2009 by the first-home buyers grant boost, naturally leading to a lull afterwards. He forecast first home buyers returning to the Queensland market in the second half of the year would become the catalyst to kick start the rest of the market.

"Higher interest rates also have affected people's ability – or need or want – to pay higher prices, so it has caused a slow down in prices as well," he said. "I think the year will start off fairly subdued, but I think as 2011 wears on you will start to see first-home buyer demand pick up again, probably in the second half of the year." "We expect the interest rates environment to be a little more steady (this year) with only one or two more rises. "So people will start to gain a bit more confidence."
Mr Zigomanis predicts the first interest rate rise will be about June, and the second in the December quarter.
He also believes investors may decide to re-enter the market towards the end of 2011.
Despite advertised stock levels falling away in the usual Christmas slow down, the total number of properties on the market was still 20 per cent higher than in 2009. Australian Property Monitors predicts homebuyer activity to remain restrained in most markets early this year, with potential price growth by mid-year. Its annual state-of-the-market report found that while Perth and Sydney would see strong price growth next year, Melbourne, Brisbane and Adelaide would experience more modest growth.
Senior economist Dr Andrew Wilson said house and unit prices in most markets slowed this year.