Property market in Oz cities showing signs of recovery

Confidence is returning to the property markets in Sydney and Melbourne according to a new survey that compares the real estate market with a clock face.

The research from Colliers International puts the top of the market at 12 o'clock and the bottom at 6pm. It puts four markets at or near rock bottom and reveals that 64% believe the worst had passed and the market is poised for recovery or already in a recovery phase.

Brisbane and Canberra are sitting right on 6pm, according to those surveyed. Adelaide and Perth are still going downwards at 5pm, but Sydney and Melbourne are past the worst at 7pm.

Overall, 30% thought the market was at 7pm and 22% opted for 8pm. A further 10% believed it was at 9pm, the trigger point for an upswing.

The report sees good signs for all real estate markets and predicts that Sydney may be the first to flex it residential muscle. 'With the largest population and the greatest imbalance of supply and demand, the only thing holding it back will be infrastructure and available development sites,' said Grant Dearlove, Colliers International's residential managing director.

Sydney and Melbourne are still experiencing population growth and have almost zero rental vacancies, against a backdrop of strong demand, he explained.

'Affordability issues have dogged Sydney's market for the past five years but there is growing confidence house prices have turned,' Dearlove added.

He described Melbourne as Australia's most affordable city for new homes. 'It has picked the right product for the market and has created a precedent for other cities to follow,' he said.

Although Brisbane is at the bottom of the property clock, Colliers International believes still booming population growth will drive a market in which developers try to meet residential product demand.

On that basis, the agency considers it a good time for investors in the Brisbane market.

It also believes the residential sector will lead a wider property recovery, as it did during the 1990s recession.

The report concludes that Australia seems to be escaping the worst of the global financial crisis. 'In a time of rising unemployment, it's a big call to say the housing market is past six o'clock, but talking to real buyers sums up a mood hope, Dearlove added.