According to BIS Shrapnel, rising unemployment and the expiry of the increased First HomeOwners Grant (FHOG) will not affect strong growth in first home buyer sector.
Brokers can also expect to see strong growth in investment activity.
Speaking yesterday at BIS Shrapnel’s Sydney business forecast conference, JasonAnderson, BIS Shrapnel senior economist, said that the fundamentals are in place for an overall upswingin the property market.
Severe under supply, rising demand and sustained low interest rates would sparkan upswing in construction towards the end of the year, he said.
“Unemployment could rise a lot further than the 7 per cent mark and we’ll stillhave a strong housing market,’ he said.
The faltering economy and rising unemployment would not impact this growth; “ifanything it would stimulate demand as the low interest rate environment wouldcontinue”.
Mr Anderson said that first home buyer activity will remain strong and “only asmall percentage of first home buyers have been active so far”.
“We can expect to see around 180,000 first home buyers this year”.
First home buyers have recently flooded back into the market following theintroduction of beefed-up first home buyer incentives.
ABS data this week showed that 26.5% of all home buyers in January 2009 werefirst home buyers.
There were around 400,000 25 to 34 year olds currently still living at home, MrAnderson said, and low interest rates, pent up demand and the relative cost ofrenting to buying would see demand from this market segment continue.
Increased buying activity among first home buyers will then spur a recovery inother market segments withhuge potential for the investment market to fire up.
With sustained low ratesand further growth in rental yields forecast investment activity is tipped tobe the next growth market, he said.
“Fixed rates of around 5per cent will bring a huge number of investors out of the woodwork.”
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