Real estate values to jump by up to 5% in 2012 says Raine & Horne

Media release: Tuesday, 3 January, 2012

Real estate values to jump by up to 5% in 2012 says Raine & Horne

  • Investors and cashed up first home buyers to push up Sydney and Perth real estate values by up to 5% in 2012
  • Real estate values in Brisbane will stabilise for the first time since 2008
  • Price rather than location will drive the buying decisions of investors and owner-occupiers

Leading real estate group Raine & Horne predicts real estate values in Sydney and Perth will rise by between 3% and 5% in 2012, while values in Brisbane will stabilise for the first time in four years.

Raine & Horne CEO Angus Raine said Europe's continuing economic turmoil and an expected hike in unemployment would put the Reserve Bank of Australia under significant pressure to reduce rates when it met again in February.

“In Sydney, the market between $400,000 and $650,000 will continue to show positive signs in 2012, with investors re-entering the market, replacing the expected shortfall of first home buyers due to the end of the stamp duty concessions on existing homes," Mr Raine said.

“It’s a misnomer that real estate investing is only about location, location, location.

“Price, price, price will drive the buying decisions of those owner-occupiers and investors considering homes in Sydney below $650,000 next year.

“As such, it’s also fair to expect that traditional apartment markets, where investors compete with first home buyers, such as Eastwood, Ashfield/Burwood, Hurstville and Dee Why, will show plenty of form in 2012.”

Mr Raine also predicts investment activity will start in inner ring suburbs such as Bondi, Newtown and Neutral Bay, while sales volumes will increase markedly from the second quarter of 2012 onwards.

Away from the city and the Raine & Horne CEO expects regional centres with decent facilities for green and sea changers will enjoy some capital growth.

“Baby boomers will look to regional centres that not only have excellent health and lifestyle facilities, but also to towns such as Tamworth, Orange and Port Macquarie, which have airports that make it easier for friends and families to visit,” Mr Raine said.

In some parts of Brisbane, the real estate market has bottomed and is showing signs of recovery on the back of the double helping of interest rate cuts in November and December.

Raine & Horne Operations Manager Sean Green said it was fair to say that 2012 will be the first time in several years that Brisbane real estate values would not fall.

“Indeed savvy investors seem to be leading the way with inner ring suburbs such as Fairfield and New Farm already in their sights," Mr Green said.

For example, Raine & Horne New Farm in Brisbane reports that 20 groups inspected 5/84 Moreton Street, New Farm in early December, and about 50% of the groups were investors. The Moreton Street apartment is a rare, smaller refurbished three bedroom apartment, which is on the market for $399,000 and could command a weekly rental of $400.

Outside Brisbane, Mr Green nominates the Noosa Hinterland as a potential growth star in 2012.

“The Noosa Hinterland is about 26km from the Maroochydore airport, which is an important consideration for baby boomers.”

Raine & Horne is also predicting 5% growth for Perth suburbs such as Cannington, which has relatively easy access to Curtin University of Technology and the Kwinana Freeway, as well as affordable Kenwick and Kelmscott in the south east.

“We also expect to see more investors in the North Perth market in 2012,” Mr Green said.

“A recently renovated two bedroom home unit at 10 / 6-8 York Street Inglewood, which is listed with Raine & Horne North Perth, attracted strong investor attention in December.”

Over the last few weeks of 2011, there were more than 40 enquiries about the York Street apartment, with about 60% of enquiries from investors seeking healthy rental returns.

“It’s a completely renovated apartment in a traditional 1970’s red-brick block, which is on the market for $349,000 and is expected to generate a weekly rent around $350,” he added.

Breakout: 2012 real estate watch

NSW – Traditional Sydney apartment markets – Eastwood, Ashfield/Burwood, Dee Why as well as inner ring localities such as Bondi, Newtown and Neutral Bay. Also transport hub towns with airports like Tamworth, Bathurst, Orange and Port Macquarie will attract renewed baby boomer interest.

Queensland – Inner ring Brisbane suburbs such as New Farm and Fairfield will enjoy renewed investor interest, while the Noosa Hinterland is a real estate market to watch as green changers continue to move to the region.

Western Australia – Affordable Kenwick and Kelmscott in Perth’s south east and Cannington in the south will be suburbs to watch in 2012, while North Perth will benefit from renewed investor interest.

Raine & Horne is an iconic Australian property firm, with more than 360 offices worldwide. Also an established Superbrand along with Qantas, Vegemite, Woolworths and Myer, the company has four distinct property service brands including Raine & Horne Residential, Raine & Horne Commercial, Raine & Horne Rural and Raine & Horne Financial.


For further media information contact:

Angus Raine, CEO Raine & Horne on 0409 920 697

Sean Green, Operations Manager on 0418 638 037

Kit Bashford, National Marketing & Communications Manager on 02 9258 5400