Last week the REIQ (in conjunction with data provider RPData), released our first set of property market statistics for the March quarter 2013.
In a result not seen for some time, most regions across Queensland saw median house prices increase or remain unchanged over the past 12 months to March 2013, compared with the same period one year ago. After what feels like an eternity, the Brisbane local government area finally posted a positive (albeit small) median house price increase of 1 per cent for the year.
But despite such positive median house price results, further analysis of the quarterly data shows that preliminary sales activity in Queensland is slightly down on the March quarter 2012. These are still only preliminary numbers mind you (recorded as at 5 weeks after the end of a quarterly period), as additional property transactions are still to be settled and processed, however a closer look at ABS Housing and Lending figures lend some credence to slightly lower sales activity.
The non-first home buyer segment appears to be doing most of the hard work keeping the Queensland property market afloat with 21,824 dwellings financed over the March quarter 2013, up 8.2 per cent versus March quarter 2012.
If you’ve been following this blog over past few months you’ll have seen special attention paid to the fall in first home buyer (FHB) activity since the introduction of the Great Start Grant (GSG). FHB dwellings financed totalled 2,557, down 49.2 per cent on the same period last year.
The following table attempts to compare FHB and GSG numbers to date, but please be aware that there would be a timing mismatch between when a dwelling purchase was first financed and a GSG finally paid. For the moment though what’s clear is the marked decrease in FHB activity and also the small magnitude in the take up of the GSG relative to those decreasing numbers (i.e. the ‘positive’ effect of the GSG appears to not have offset the ‘negative’ effect of the initial First Home Owner’s Grant (FHOG) expiring, in spite of a low interest rate environment).
Oct-12 numbers appear to be a bit of an anomaly, though my take it is that it was unusually high due to FHOG-buyers securing finance at the last minute, in addition to the one-off wave of GSG-buyers whose numbers have now dramatically tapered off.
With such lacklustre FHB activity and the likely effect this has had in decreasing overall market turnover (remember FHBs typically buy existing dwellings from upgraders), we’re left wondering what might have been for the Queensland property market in the March quarter 2013.
Market recovery is always never without its challenges, but we’re taking some positives out of some of these figures. House prices do appear to be increasing at a steady level and the non-FHB segment of the market remains strong. The property market tends to slow down over the three months to June, but our fingers are crossed that the colder weather and a looming election won’t drive buyers into hibernation.