SW real estate market stirs

Busselton’s property market has awoken from its slumber, according to real estate agents.

Sales are reportedly on the rise, spurred on by a combination of cheap mortgage rates, fly-in, fly-out workers and soaring rents.

Stocker Preston director Peter De Chiera told the Times he had gone from a surplus of properties to a shortage at the lower end of the market.

“We’re running out of stock and are out canvassing for more listings, ” he said.

“It’s not unusual to get between 10 and 20 people coming through each open house, whereas 12 months ago you were lucky to get a couple.”

Mr De Chiera said the effects were starting to filter through to the higher end of the market.

Prices had not jumped yet, but vendors were catching on to the increased buyer activity and would eventually ask for more money, he added.

The WA division of the Urban Development Institute of Australia has released figures showing housing finance is at a three-year high across the State.

Falling mortgage costs caused property owner-occupier housing finance, excluding refinancing, to increase 4.9 per cent to $1.5 billion in November.

Harcourts Busselton director Neil Honey told the Times the shortage of listings had prompted the company to use auctions.

“There’s an abundance of buyers so we’re opening it up to create competition and secure better prices for the sellers, ” he said.

Mr Honey predicted growth of six to seven per cent in 2013.

“Twelve months ago, buyers could be a bit cheeky when putting in offers, but now the advantage has shifted to sellers, who are digging their heels in and being more selective.”

Aussie Geographe mortgage broker David Forster said he had noticed an improvement in the number of contacts made to his office in the past five weeks.

“We expect the Australian market to pick up in 2013 as we are near to (or) at the bottom of the cycle, ” he said. Enquiry rates for both investment and owner-occupied mortgages in Busselton, Dunsborough and Margaret River were increasing, he added.

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Prestige property market looks good

IT'S been a tough five years of trading in Australia's prestige property market. As one of the worst-hit sectors during the 2008 financial meltdown, much of the country's high-end real estate market (houses valued at $3 million to $5m) suffered double-digit losses, with sliding demand and weak consumer confidence to blame.

Since then, the performance of the market has been mostly underwhelming, blamed in part by a refusal by vendors to compromise on a sale price for their home, and also cautious buyers, waiting until prices plateaued.

But there's optimism among some real estate agents, who are hopeful of a looming prestige property revival on the back of increased demand by domestic buyers, who believe the market has hit bottom, and a potential influx of foreign investors, lured by a recently announced government scheme to boost Australia's growth.

As the Chinese government changes property ownership regulations to slow Hong Kong's extraordinary growth, real estate agents believe countries such as Australia could benefit - with many Chinese investors turning to Australia as a safe and lucrative place to invest.

Real estate prices in Hong Kong have doubled since 2009 because of low interest rates and soaring demand, prompting the Chinese government to recently introduce new regulations - including an increased stamp duty - to slow the property market.

Last week, Hong Kong's most expensive apartment sold for nearly $US60m ($57m).

Sydney real estate agent Michael Pallier says the Australian prestige market has undergone a quiet but substantial shift during the past six months as investors expanded their property portfolios.

"One of the main reasons for increased market activity is vendors now meeting the market; people have accepted they can't ask the same prices they would have five or six years ago," says Pallier, who works for Raine & Horne in Sydney's Double Bay.

"Prices have began to stabilise in the $3m-$4m range and I think people are starting to realise there's great value to be had in the market.

"Psychologically, people are switching back to real estate as a safe place to put their money."

In the meantime, a decision by the Australian government last week to attract wealthy foreigners by lowering the bar for visa applications in return for investment in Australia, could have positive implications for the prestige property market.

The government says it will also fast-track visa applications for immigrants willing to invest at least $5m in approved Australian assets and state and territory government bonds. Although real estate isn't a complying investment, it's expected the flow on from wealthy Chinese investors conducting business in Australia will increase demand for prestige property.

"The government expects over 700 families to take up this offer, which will have huge flow effect for our property market," Pallier says.

"We expect families will buy real estate, a car, furniture and will likely educate their children here. I think it could bring up to $10 billion in the first few years."

Perth real estate agent William Porteous says he isn't expecting a boost from foreign investors, but a willingness by vendors to sell has increased sales. Porteous Property International cleared more than $30m of property worth between $2m and $5m last weekend. "The mood has changed in Perth; people who were once too frightened to put their hands in their pockets are now beginning to realise if they don't buy now they could miss the boat," he says.

However, unlike Sydney, Porteous says the majority of sales were from couples looking to downsize or families looking to upsize, rather than investors. After an oversupply of property during the mid-2000s, southeast Queensland's prestige market is also at a turning point, according to Brisbane real estate agent Patrick Dixon. He says 2013 will be a good year for buyers to get their hands on what was once considered out-of-reach property, as people buy at the bottom of the market.

For the original post visit: http://www.theaustralian.com.au/life/prestige-property/prestige-property-market-looks-good/story-fn6njxlr-1226525997434