Solid signs for property

THERE has been a fast turnaround in the property market since the start of the year and there are clear-cut signs it is reverting to being a sellers' market.

A significant factor influencing this about-face is that housing finance has become cheaper and easier to obtain.

There's also evidence of pent-up demand.

More cashed-up buyers are looking to buy and the auction clearance rate has been spiking up.

There are several other key economic indicators that point to 2013 being a good year for property, too.

They include:

Rising wealth

The Australian sharemarket has performed remarkably strongly over the past year, boosting many people's wealth. Even if you don't own shares directly, everyone who has superannuation has exposure to, and can benefit from, the market's performance.

Share prices have surged about 25 per cent over the past 12 months and climbed about 10% since the start of this year.

It's a market shift that gives confidence, as well as extra cash, to investors and home buyers.

Asset choice

Growth assets, such as shares and property, will become more attractive as the low-interest-rate environment gets traction.

Since May last year, property buyers have benefited from four cuts to the official cash rate, and some economists forecast there are more cuts to come.

Investing in cash and term deposits is clearly becoming less attractive.

In the coming months, more Australians will be tempted to move from holding cash to investing in bricks and mortar and shares.

New confidence

The latest Westpac-Melbourne Institute survey of consumer sentiment reveals that confidence in the economy has lifted to its highest level in more than two years.

Nielsen's Global Survey of Consumer Confidence and Spending Intentions for the last quarter of 2012 says Australians continued to be comfortable about increased spending, with 44% believing their employment prospects for 2013 were "good" or "excellent".

Surveys show business confidence is rising, too. That's good for the economy and jobs.

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