According to property developer Mirvac, the market downturn in the two largest cities is over its worst phase and starting to recover, with sales expected to increase in due course. Susan Lloyd-Hurwitz, Chief Executive of Mirvac, says home sales inquiries have increased across all Mirvac projects and there have been clear signs of improvement now in the residential markets of Sydney and Melbourne.
Mirvac has pushed into its next residential development stage with the purchase of new land sites in Sydney and Melbourne. Mirvac also found that there was a rise in loan approvals and an increase in auction activity that helped the property market’s revival.
Reserve Bank deputy governor Guy Debelle says: “while the increase in supply has finally met the earlier increase in demand, demand will continue to grow given population growth but supply is going to decline. So there is quite likely to be a shortfall again in the foreseeable future. Hence some large developers tell us that they are prepared to retain their employees through the coming trough inactivity. That said, the outlook for smaller contractors, which are quite prevalent in the housing sector, is not so great in the period ahead.”
Debelle says demand is continuing to increase given population growth. While there are pockets of oversupply, particularly in parts of Sydney where the vacancy rate is high, they are not widespread. Prices have turned in Melbourne and Sydney (though not Perth or Darwin), which probably brings the property investors back into the market.