Outlook for Property in Australia 2009

Well first the good news - the generous grants to first-home buyers seem to have worked. Some 30,000 people have applied for the up to $21,000 grant between mid-October and end January 2009. Figures for grants approved have ramped up to nearly 13,000 in January. The scheme is currently due to run until 30 June.

The increase in first-home owner grants, announced in October looks like it has risen the annual rate of grants from around 100,000 to 144,000 - a pretty impressive up-beat story  in what is otherwise the continuing sad saga of Australian property news.

Overall the next year or so looks bad for the building industry, the expected number of new homes is around 132,900, 17% fewer than last year. The state worst affected is the former boom state of Queensland. The less spectacularly booming states of Tasmania, South Australia and ACT will come out of the construction slump looking at lot better.

Despite the lowest interest rates in 45 years the Housing Institute Authority still considers the current market to be weak, but with some prospect of improvement based on government grants and continuing low interest rates.

Pot of Gold at End of Rainbow?

For the same reasons as New Zealand, housing affordability is seen as the best for five years. The biggest risk to the housing industry is unemployment - with worst-case predictions of unemployment reaching 9% within the year. This is the unpredictable part of the equation - even in the former boom town of Perth supermarkets are now reporting 100's of applications for $15/hour jobs, jobs which barely generated an illiterate text message response a few months ago.

Auction clearance rates continue to edge up - but the overall value of property sold is drastically down. In Sydney Sydney last weekend, 63.9% sold for $94.9 million compared to 56.3% for $238.3 million a year ago. Maybe buyer are finally catching onto the auction con so loved by agents? (Hint the money is in the fees not in the supposdely high price people!).

The news is not all bad though - if you are secure about your income I'd suggest now is a great time to renovate - you will get a lot better prices for trades than you would have this time last year!

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