Mixed messages for 2010
As a group, we property owners are a jittery bunch! Sure we do have a lot at stake, with an inner Brisbane property now regularly topping the half million dollar mark. But it still surprises us to see how much some owners look to the news and ‘property soothsayers’ for guidance. Boom or bust? Sell, buy, panic? If the global economic challenges showed us one thing, surely it’s the importance of trying to read the tea leaves yourself. So here’s some of the forecast signposts for 2010.
Unemployment this week nudged down to 5.7% (up slightly in Queensland) but most economists point to this growing to high 6’s during 2010. More people will lose their jobs, effecting buying power. But Phil Ruthven of IBISWorld is upbeat for 12 months time, predicting “a return to full employment by early 2011”.
Variable mortgage rates will be around 7.75% by the end of 2010, according to a BRW Magazine report on economists’ consensus. This reflects an RBA position in “neutral”. Combined with an end to Federal stimulus offers, especially to the general public, rates rises will leave home buyers with less to spend. The temporary boost to the First Home Owner’s Grant (now $3,500) ends on December 1st, albeit the Grant will still be $7000.
New housing construction remains slow. The Housing Industry Association says “We are looking at a moderate rather than strong lift in new home building in 2010. This disappointing outlook will remain in play until such time as credit constraints on medium and high density developments are eased.” That means some new suburban housing but bank not supporting inner city development. Given the long lead times for new inner Brisbane projects supply may remain tight for some time yet.
New Brisbane infrastructure will make our inner city more ‘liveable’. The Clem 7 Tunnel and Go Between Bridge will each make traveling around, and into, the city much quicker. And the CityGlider bus service will start running from Teneriffe through the CBD to West End on a 10 minute interval, vastly improving non-car movement.
Will prices rise again? Will investors find new reward from rents returning to an upward trend?
The only sure bet for 2010 is that 20/20 hindsight will count for nothing. If the new year presents the right opportunity for you maybe it’s time to act on it…