Market

The previous 12 months have been patchy at best with the first-home buyer almost non-existent, due the reduction of the government subsidy. 

The medium-level market has also been slow with prices levelling, and in some cases dropping.  The level hardest hit is the luxury market, both in houses and units, where in some cases there have been significant price reductions. 

Over the past 5 years we have seen the median unit price increase from $332,000 in 2005 to $375,000 in 2010, and median houe prices increase from $390,000 to $485,000.

The most recent RP Data-Rismark Home Value Index shows Australian dwelling values were up to 0.3 per cent in seasonally adjusted terms during October, and predicts residential property to be fairly sedate over the coming months. 

The RP Data quarterly review has shown the holding period for property has significatnly increased on houses from 5.6 years in 2005 to 7.4 years in 2010 and units from 4.8 years in 2005 to 6.9 years in 2010.

2011 will commence as a buyer's market due to the number of properties on the market and the slow turnover rate.  Prices will remain flat over the 1st quarter and, depending on what the Reserve Bank does with interest rates, may remain flat.  If that is not enough to make the market uncertain, there are the big four banks, likely to make decisions to increase interest rates independent of the Reserve Bank.  If they do increase rates, it will slow the market even further.

Thing to note in 2011 are:

1.     Initially it will be a buyer's market making it a good to time to buy.

2.    If a vendor has a reasonable offer on their property, consider it very
seriously as the buyer is showing good interest in the property and has    researched the market thoroughly.

3.    If better priced properties sell it will reduce the number of properties on the market and put an upward pressure on prices, which is good for vendors in the long term.