Property market 'is showing signs of improvement'
Article by Mozo
A leading housing developer believes the Australian property market is finally showing signs of a recovery.
Bosses at AV Jennings have suggested that house hunters are more confident than they were six months ago and the firm is likely to launch new projects as a result, the Australian Associated Press reports.
The company had scaled back the number of new houses it was building, as the demand for mortgages has been largely subdued.
Indeed, many Aussies have been harbouring concerns about the precarious state of the global economy since the crippling financial crisis in 2008-09 and have been unwilling to commit to a home loan.
This inevitably led to lower house prices, as supply started to outweigh demand, but AV Jennings chief executive Peter Summers thinks that Aussies have renewed faith in the housing sector.
"Our recommendation now as a management to the board is that we start reversing [the cutting back of housing stock] and start actually producing a little more inventory," he was quoted as saying.
"That is our belief that the market is starting to improve."
Mr Summers thinks that low unemployment and recent interest rate cuts have helped to give the property market a timely lift.
The Reserve Bank of Australia (RBA) trimmed the national cash rate by 25 points in October and this followed a series of reductions starting in November 2011.
With the cash rate at a three-year low of 3.25 per cent, it seems Aussies see now as a good time to take out a home loan.
"There is such pent-up demand out there that recovery will occur," Mr Summers added.
Members of the Housing Industry Association (HIA) declared their delight earlier this week (November 20th) as details of plans for a huge new housing estate in a Melbourne suburb emerged.
Around 7,000 homes will be erected in East Werribee and the HIA believes this is exactly the type of project that is needed to kick-start the struggling property sector.
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