Christies Beach The most relative insights for the property sector contained in the minutes from the June board meeting were as follows:
‘Households had continued to be cautious in their spending and borrowing behaviour. With household income growth strong in the March quarter and consumption increasing more moderately, the household saving ratio was estimated to have risen. Members observed that the saving ratio was now back to levels seen in the mid 1980’s and that the increase from earlier unsustainably low levels was a positive development. Consistent with ongoing consumer caution, the housing market had remained soft. Average dwelling prices had fallen modestly so far in 2011, with the weakness mostly in more expensive suburbs and in cities (notably Perth and Brisbane) that had seen a faster run-up in housing prices in earlier years. Housing credit growth had slowed and housing loan approvals had fallen in the first three months of the year, although preliminary numbers for April showed an increase.’
This current market provides sellers with the ability to trade up to a more expensive home than the one they currently own with a far reduced changeover cost than they would endure in a more buoyant environment. Similarly many investors are taking advantage of this same opportunity to increase their residential holdings or upgrade to a newer or better rental property, and with it are enjoying increased returns, potentially increased tax depreciation with lower maintenance expenses and stronger capital growth prospects.
