Lingering concerns about job security and the upcoming federal election could undermine growth in the Australian property market in 2013, LJ Hooker has claimed.
“Domestically there are a couple of wild cards that could limit the amount of confidence, such as the election and even dialogue between the various parties,” said LJ Hooker deputy chairman, L. Janusz Hooker.
“Employment has strengthened recently but we just don’t know yet what will happen, given most major companies have forecast reduced capital expenditure.”
Mr Hooker said the housing market would only improve if buyers regained confidence, and while he expects the Reserve Bank to cut the official cash rate by another 50 basis points through to June this will not be the `holy grail’ to driving the property market.
Mr Hooker’s sentiments mirror those of Australian Property Monitors (APM) senior economist, Dr Andrew Wilson. He said low interest rates would do little to stimulate the local property market while governments cut back on spending and consumer confidence remains weak.
On a positive note, Mr Hooker said Australia’s lack of housing and population growth – with an expected net migration of around 250,000 people in 2013 – could put pressure on property prices.
Rents are also forecast to continue to grow, he added, which should attract more investors.
“People have been sitting on the sidelines waiting to see what happens and there is pent up demand from buyers at all levels," Mr Hooker said.
“It won’t be a mad rush but you will see prices going up and sale volumes will move up towards trend by this time next year.”
The luxury high-end market is expected to be the first to enjoy price recovery having been hit the hardest by the downturn, he continued.