Feeling of optimism for local property market in 2013

THERE has been plenty of conjecture since the start of 2013 about what lies ahead for the property market: Has the market bottomed out?

Coffs Coast agents believe the market will be slightly firmer in 2013. Picture: GETTY IMAGES

THERE has been plenty of conjecture since the start of 2013 about what lies ahead for the property market: Has the market bottomed out? Will prices rise this year? Will interest rates fall and by how much?

As Sawtell Real Estate principal Danny Whalen said: "It could go either way".

While admitting they have no crystal ball predictions for the market in 2013, most local real estate agents have an optimistic outlook, boosted by a strong end to 2012.

Year 2012 went out with a bang

"The market really came alive in the last quarter of 2012," said Nolan Partners principal Scott Nolan.

"The Nolans team experienced their best final quarter since 2005."

Atkinsons Real Estate was equally busy, with principal Martin Wells reporting the agency sold out of sub-$450,000 properties in the closing months of 2012, while LJ Hooker figures showed the chain's unconditional sales in December 2012 were up by 25% compared with the same month in 2011.

LJ Hooker's performance was their best since the GFC in 2007.

Raine and Horne Coffs Harbour principal and board member of the Real Estate Institute of NSW, Christine Clarke, said there was a marked improvement in volume of sales and a firming of prices during the final quarter of the year.

"I think it's fair to say that the biggest challenge to agents in the later part of the year was a shortage of stock in the most popular categories," she said.

The most sought-after properties continue to be modestly priced homes and units.

"The greatest improvement was certainly in the $350,000 to $450,000 family home segment, with demand certainly outstripping supply," Ms Clarke said.

Nicole Cardow Real Estate principal Nicole Cardow said the $300,000 to $400,000 bracket was the most in-demand price range on the Northern Beaches, but she said big spenders were also emerging.

"There seems to be more interest in the higher price ranges which hasn't been there for a number of years," she said.

Strength in the market in 2013

The strong end to the year has also spilled over into 2013.

"We have noticed a lot more confidence in the market," said Woolgoolga Real Estate principal Cheryl Midavaine.

"So far this year we have been really impressed with turnout at our open for inspections and have achieved some sales so far, which is fabulous."

Interest is also strong in the southern suburbs with Professionals Sawtell licensee Tom Sullivan reporting a good recovery during 2012.

"The increase in buyer confidence was certainly helped by the fall in interest rates and the prospect of further interest rate reductions in 2012 certainly suggests that interest in real estate will remain strong throughout the year," Mr Sullivan said.

Interest rates will be a factor

Interest rates have been a strong talking point early in 2013, with NAB predicting the Reserve Bank of Australia will cut rates three times by September to an all-time low of 2.25%; they'd previously predicted just one rate cut.

While an interest rate cut sounds good on paper, agents warn it won't necessarily translate to an increase in buyer activity.

"Interest rates reductions will benefit the market, but they'll be offset to some extent by tougher local business conditions," said First National Coffs Coast managing director Barry Booth.

"Job security and lack of leadership and confidence in the federal government keeps buyers in a very conservative frame of mind. 2013 is also an election year, which historically adds to buyer hesitation."

Atkinsons Real Estate's Martin Wells agrees.

"It has to be remembered that these rates cuts are targeted at stimulating a faltering economy," he said.

"When it does become advantageous to purchasers is getting into the property market as it is commencing its climb out of the bottom of the cycle, taking advantage of perhaps fixing low interest rates and reaping the increase in equity as the market climbs."

LJ Hooker principal Paul Tobias said the optimism created by rate cuts would help confidence.

"Buyers may feel as though they are in the most comfortable position to secure a home loan and purchase a property, giving buyers more confidence to either step into the home owner pool or to increase their current portfolios," he said.

Tough times for first home buyers

All agents agree the plight of the first home buyer in 2013 is difficult.

"We are seeing less first home buyers due to the lack of government incentives on established homes," said One Agency Joanne Vines principal Joanne Vines.

"There is a need to definitely bring back first home buyer grant incentives and stamp duty exemptions."

It's hoped the series of facelifts on roads and retail in the Coffs Harbour region will also lead to a sustained improvement in the market.

"Park Beach Plaza's redevelopment is equal to any major city's offerings and the city centre is finally taking on the look of a city," Raine and Horne's Christine Clarke said.

"The cafes and shops give a cosmopolitan feel and people are voting with their feet - I haven't felt a more positive vibe in Coffs in the 33 years I have lived here."

Scott Nolan agrees.

"All of this work continues to make the Coffs Coast an even better place to live and this can only lead to more interest in the area from out-of-town buyers and investors. I believe we should see an upward swing over the next two to three years," he said.