Up-graders will be a force to be reckoned with in 2010, according to the LJ Hooker/BIS Shrapnel Residential Property Index.
Up-grader activity in the December quarter last year represented 38.1 per cent of overall activity – the highest level seen in 12 months.
Moreover, with interest rates still low by historical standards, market analysts expect up-graders to purchase confidently this year.
“In the absence of continued first home buyer growth, demand from both up-graders and investors will be pivotal to sustained price growth over calendar 2010,” the report said.
“Certainly the December quarter figures showed a rise in the number of up-graders entering the market across most capital cities, which should create continued demand going forward particularly in middle to high range properties.”
Trends in the Residential Price Index had property price growth rising over the three months to December 2009 in all capital cities except Hobart, where prices have softened since an October 2009 peak.
Sydney prices increased mildly by 1.9 per cent in the quarter and on a year-on-year basis rose by 4.4 per cent to December 2009, the best result since the middle of 2008.
Brisbane’s index has risen significantly since its March trough – a total 24 per cent, and rose a substantial 8.9 per cent for the quarter. This led to a strong annual growth rate of 18.8 per cent for the 12 months to December.
Similarly to Brisbane, Adelaide experienced significant growth in the house price index over recent months increasing by 11.5 per cent for the December quarter. This highest quarterly growth since February 2008 highlights a recovering economy on Adelaide house prices.
Perth also recorded the highest quarterly growth rate in some time with the December quarter growth of 5 per cent being the highest since January 2007. Up-graders appear to have been instrumental in this resurrection, accounting for 49.1 per cent of total Perth house sales in the December quarter 2009.