First time buyers still the indicator to watch
The prevailing economic situation in Australia and the rest of the world is more likely to see the status quo maintained next year, despite predictions of a housing market recovery in 2013, according to Laing+Simmons.
However, activity among first home buyers, an important indicator for the health of the overall market, may remain subdued, the real estate agency's 2013 outlook says.
According to Laing+Simmons' general manager, Leanne Pilkington, this is not necessarily bad news. Rather, transactions will take more time and care to negotiate and the best agents will again emerge to dominate market activity.
“Next year it will be seasoned agents familiar with the hard work it takes to achieve results who succeed in a challenging market," she said.
"Negotiation skills and the capacity to work with and educate vendors is necessary to drive sales because buyers will be unwilling to proceed with speculative transactions."
The impact of global economics on the domestic market has been heightened since the global financial crisis (GFC) and, from a consumer perspective, this largely manifests as an indicator of sentiment, Laing+Simmons said.
The 2013 outlook highlights that the European Central Bank recently signalled a gloomy year ahead, reducing its economic growth forecast for the European Union in 2013 from 0.5 per cent to negative 0.3 per cent.
The impact of this, in addition to the ongoing challenges faced in the US, is likely to be more of the same on our shores; questions surrounding the longevity of the mining boom will temper sentiment further.
“While the reaction to global economic conditions here might be for a further reduction in interest rates next year, the reality is ongoing caution among buyers should see the housing market in 2013 commence where it left off in 2012, with activity largely confined to motivated buyers and vendors as opposed to speculative plays,” Ms Pilkington said.