2013 was the year of sensational events that never happened.
We heard about a bubble, but there wasn’t one.
We read that the Australian property market was white hot, but with rare local exceptions it wasn’t so.
There was much discussion about an affordability crisis, when all the statistics showed the opposite.
We were told yet again about the mythical housing shortage crisis, but neither the vacancy figures nor the rental growth data supported the notion. According to the REIA, six of the eight capital cities have vacancy rates ranging from 2.7% to 4.5%.
Some reported that the market had peaked, despite the lack of supporting evidence.
So what really happened in 2013?
It was year in which nothing remarkable happened at all. It was a year “full of sound and fury, signifying nothing”.
Some of our biggest markets sparked to life for the first time in many years. Sydney produced its first year of meaningful growth in a decade, though well short of the runaway boom depicted by an irrational media.
Perth produced its first year of solid price growth since its previous peak in 2007. Melbourne showed some life as well, but annual growth in the median house price was moderate, around 6-7% according to three major research sources. (We ignore the inflated figures published by the REIV).
Elsewhere among the capital cities, there was little to shout about. Darwin started the year as the market leader but its numbers moderated throughout the year. Brisbane showed the first glimmers of a return to price growth, but only 3-4% in annual terms.
Adelaide, Canberra and Hobart were largely non-events. As usual, it depends on whose figures you believe. Using the ABS House Price Indexes as a guide, annual growth was around 1% for all three cities.
All in all, it was a year that at no stage warranted the hysterical headlines it generated. The average result across the state and territory capitals was annual growth around 6% or 7%, with most of that figure generated by just three of the eight cities.
The real star performers were places we never heard about because they were out in the regions. Some regional centres recorded median price growth above 15%, including Port Lincoln in South Australia, Narrabri in New South Wales and Miles in Queensland.
So what did we learn this year?
The greatest lesson is that there is no such entity as “the Australian property market”. There are thousands of local markets, moving in various directions and at different speeds.
We learnt that boom-style growth is more often a curse than a benefit, as developers have an extraordinary ability to destroy those markets with over-supply. Central Queensland was surplus central in 2013, with Gladstone, Mackay and Emerald all experiencing declining markets because of over-building. We have previously seen high-population growth locations like Wyndham City and the Gold Coast go into sharp reverse, weighed down by too many new dwellings.
We learnt that developers don’t really care if major city markets are over-supplied as long as they can flog off their apartments in China. Melbourne is a stark example and inner-city Sydney and the Gold Coast are poised to follow suit. Smart investors will avoid these places.
We also learnt that the worst place to go for balanced and accurate information on real estate is the metropolitan newspaper industry.
So what of 2014?
I expect a solid year, with the price growth more evenly spread than in 2013. Brisbane will rise through the pack to be a market leader in 2014. Sydney and Melbourne will moderate somewhat but still have positive years, while Adelaide will produce its best growth since 2010.
The big struggler will be Canberra. It has an over-supply of dwelling, particularly apartments, and the public service cuts by the new federal government will hurt.
APF - a place where serious people don't take themselves too seriously. There's nothing else like it.
or local the crisis which divert attention to white shoes,
and possibly line its pocket.
hang on a minute, didn't the Mylyns say we supposed to get hit by an asteroid and swallowed up by a giant space whale last year? The worst that will happen to the average cat on the street in 2014 will be .5% down, and you can take that to the bank.
APF - a place where serious people don't take themselves too seriously. There's nothing else like it.
2013 - The year that we really sold the place out to the Chinese.
The year that I learned that even most smart people are morons. Looking at you MB and your followers.
They had a chance to vote for housing affordability, and they didn't even vote for it by voting for the SPP! They voted Green(who barely even have a housing policy) and so that went to Labor.
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
I'd say the ECB withdrawing from OE throughout 2013 will proven significant. In the course of the year the ECB balance has fallen from 3 trillion to below 2.3 trillion and pull back is continuing every week.
The next trick of our glorious banks will be to charge us a fee for using net bank!!! You are no longer customer, you are property!!!
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