Brisbane Highlight Report Q2 2011
Given interest rates have remained on hold since the surprise rate rise in November 2010, it is hoped that momentum would build as confidence filtrates back into the property market. However, the latest figures show that activity has in fact quietened further, with recent statistics released by the ABS showing a considerable annual decrease of 9.2% in the national issue of home loans.
In stark contrast to the home owner market, there has been significant tightening within the rental market, as vacancy rates decreased 0.4% during the December 2010 quarter and rental prices increased. This strong performance within the rental market has arisen from a growing demand for rental properties, facilitated by a shortage of active buyers and a large number of displaced residents following the January floods. With rents on the rise and the price of property declining as vendors are forced to meet the market, it is expected that investors capable of purchasing a well-placed property will begin to enjoy stronger yields.
In conjunction with factors such as a strong rate of population growth, shortage of new development and a robust economy, the Reserve Bank of Australias decision to keep the Cash Rate on hold at 4.75% in May has helped keep the property market steady. However, economists are now predicting a rise in the cash rate will occur in the near future as inflation has recently experienced an unexpected increase. Although this will continue to prompt budget conscious households to avoid committing to further debt obligations, it is likely that the property market will remain stable at least for the remainder of 2011 with provisions for further gradual price corrections.