There are a number of factors to consider when trying to look into the crystal ball and predict what is going to happen to residential real estate in the Illawarra in the next 12 months.
The primary driver at the moment would appear to be a wide spread shortage of property for sale. Coupled with slow land releases and a lack of major unit development at the the moment, basic supply and demand economies would indicate upwards pressure on prices.
As far as demand is concerned, there seems to be no shortage of buyers for property at the right price. Investors are starting to come back into the market, taking up some of the slack left by the drop off of first home buyers after the extra subsidies ended on 31 December 2009.
Rises in prices will only be modest however as several negative factors will have an impact. Firstly the 3 interest rate rises of recent times and the probability of another 25 basis points on 2 February 2010 after the Reserve Bank Board meets, along with some job insecurity in the region.
Overall, however I think that the market will be reasonably positive with modest price growth throughout the coming year.
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