National house prices fell 1.3 per cent during March, following a 2 per cent decline in prices during the December quarter of 2011.

Western Australia has managed to loose the least from it’s property values as compared with other states. WA residential property prices fell by just 0.1 per cent over the quarter.

Queensland was the poorest performer, with prices falling 2.4 per cent.

According to the NAB report, house prices across all states are expected to fall by just 0.2 per cent over the next twelve months….with hopefully the next direction in prices after this move being up.

If RBA decide to drop the cash rate further during their next meeting in May, this will make Australian Home Loans cheaper and will hopefully also boost the currently low levels of demand for real-estate.

The white picket fences no longer hold the same allure they once had. Now we want to have financial independence or financial security and are happy to sacrifice home ownership in the process.

A new survey by superannuation fund SunSuper has found “owning a big house in the suburbs” is well down the list of our priorities.

The survey asked 1,300 respondents across generations X , Y and baby boomers to name their “great Australian dream”.

Only nine per cent of respondents listed “a big home in the suburbs”, placing it in equal third place alongside having a good job and winning lotto.

Financial independence at retirement (37 per cent) was by far the most popular `dream’, followed by early retirement (13 per cent). Many people look to use their home loans as their personal bank and access available equity for further investment with the view of generating revenue.

Professor Peter McDonald, director of Australian National University’s Demographic and Social Research Institute, said longer life expectancy and cost of living pressures contributed to the importance placed on financial independence at retirement.

IN the past owning a home was enough and people were content to live off an age pension – not so today.

Australians are living much longer than they did 40 years ago, so now people can be much more optimistic about what they can do in retirement.

It is not that people no longer seek home ownership, they want to have a better quality of life and they are prepared to apply for mortgage refinance to get it.

It seems that only 60.3 per cent of properties offered for auction in Sydney over the weekend, actually achieved a sale – slightly higher than the 56.4 per cent recorded this time last week.

In Adelaide and Brisbane the results were much the same.

A mere 32.1 per cent of properties offered for sale via an auction in Adelaide this weekend, achieved a sale, while Brisbane auctions sold 34.0 per cent of properties offered.

The most expensive property to go under the hammer this weekend was a $4.9 million, four bedroom house in Paddington.

In Melbourne, the high end market has failed to perform strongly over the last few months – which could be an indication of things to come,  according to Real Estate Institute of Victoria chief executive Enzo Raimondo.

The demand and clearance rates seen in Melbourne over the past fortnight are probably a good indication of what we can expect this winter. While home loans are a little cheaper than they were this time last year and property prices are a little lower, the demand is not as strong as it could be.

“Next weekend 1,050 are expected. The following weekend has only 40 auctions scheduled due to Easter.”

According to new RP Data figures, as of the December quarter, 6.4 per cent of Australian homes were estimated to be in negative equity, a sharp increase on the 4.9 per cent at the end of the previous September quarter.

Australian homes that are worth more than double the price their owners paid for them have also fallen away to 42 per cent, down from 43 per cent in September.

Over the five years to December 2011, capital city home values had seen appreciation in value of  about 25 per cent, however over the past quarter values have appreciated at a much slower rate causing the number of homes in negative equity to rise.

Around 40 per cent of homes in Australian capital cities that are in negative equity have been owned for less than two years. This reflects the downturn in the housing markets since late 2010 when home values fell by 5.5 per cent.

Sydney’s Point Piper has been identified as Australia’s most expensive suburb, with a median house price of $5.21 million dollars in the midst of property price meltdown of 2011.

The high-end property’s median house price was almost $1 million more than Tamarama, which took out second place with a median house price of $4.3 million.

Sydney took out the top five positions on the most expensive suburbs list for Australia, with Bellevue Hill coming third followed by Vaucluse and Double Bay.

Surprisingly the Melbourne expensive suburbs were not headed by Brighton or Toorak but rather – Deepdene.

Deepdene was the first non-Sydney suburb on the list placing sixth with a median price of $2.5 million.

Melbourne’s Toorak and Perth’s Dalkeith, both with median prices in the mid $2 million range, took eighth and ninth place respectively.

And Mosman was tenth on the list with a median price of $2.25 million.

According to statistics released by RP Data, the truth hit property sellers very hard – no one was buying. Some parts of the country fared worse than others. The fact that borrowing for home loans was very difficult, did not assist the sale of property.  First home buyers needed to put together larger deposits to qualify for home loans and low doc home loans were completely reworked by the NCCP.

Nationally, residential property sales declined 25 per cent below the decade average while in Brisbane they fell by 36.9 per cent. In all 34,368 properties sold in Brisbane last year, compared with 69,226 in 2007, before the start of the global financial crisis.

RP Data research analyst Cameron Kusher said only 373,000 sales were recorded across Australia during 2011.

The number of properties selling had started to fall away in September 2009 and continued to drop throughout last year.

This coincided with a decline in the volume of home loans and new home loan applications.

Houses accounted for 67 per cent of all sales last year.

“Clearly 2011 was a weak year for housing transactions,” Mr Kusher said. “In my opinion, the higher interest rate environment throughout much of the year and the general conservative nature of consumers appeared to be the biggest influences on such a low volume of sales.”

While the number of property sales dropped substantially last year so did Brisbane house values with median house prices down almost 7 per cent.

A number of economists are confident that the Reserve Bank will cut rates further in 2012 which is likely to improve residential property market sentiment further.

Housing Industry Association chief economist Harley Dale said investors with adequate savings would do well to invest in property as it is a real “buyer’s market” at the moment.

However property purchase is not a small investment and anyone looking for quick gains should stay away. There are the stamp duty on purchase, legal costs and costs of obtaining home loans. If you are prepared to wait for 5-10 years, then property should be a great investment.

There is significant competition between vendors at the moment, which is putting the bargaining power firmly in the hands of the buyer.

Furthermore home loans are at very low levels with fixed rate loans available at under 6%.

“So, if you have the funds to make a financially responsible decision to buy property, then now is definitely a good time to buy.”

Of course, Mr Dale warned any investors entering the property market to bide their time before selling.

“We are not seeing the yields we saw 10 years ago. In many instances, this makes the buying environment even better. But, if you want to see a return on your investment, you have to be in it for the long haul.

It was the first major sales weekend for 2012, and was widely seen as an indicator of the health of the market.

Agents and buyer advocates reported their results with some relief yesterday, saying the improved rate showed greater confidence on the part of buyers and realism from vendors.

Marshall White for example had maintained an 80 per cent clearance rate over the past three weekends.

Wakelin Property Advisory director Richard Wakelin said confident first home buyers were inspiring people to upgrade current properties to new homes.

”It’s not unusual to see people in Northcote, Clifton Hill and Fitzroy moving to Kew and Hawthorn for the schools. But there’s also a strong sense of community among people who are staying in the area and trading up to a double-fronted house from a single-fronted,” Mr Wakelin said.

Jas H Stephens agent Tate Moore said there were plenty of couples with young families out in the market. ”It’s still a bit hard to gauge but results across the board are reasonably good,” Mr Moore said.

However, there is still a slowness in the market for all homes and apartments priced beyond $2 million.

In East Melbourne, a two-storey terrace at 112 Powlett Street sold after auction for $2.045 million after a slow auction with only two bidders.

Last sold in 1977, it had been sympathetically restored and had escaped modern renovations.

Bennison Mackinnon agent Nathan Waterson handled the property and another two-storey terrace around the corner, at 125 Gipps Street, which was passed in on a vendor bid of $3.85 million.

One genuine bid was made for the renovated property at $3.775 million.

Mr Waterson said offers were made at the selling price but the sticking point was the longer settlement period demanded by the vendor.

Its neighbour, 123 Gipps Street, is also for sale through an expressions-of-interest campaign with Jellis Craig.

It has an asking price of more than $6 million but was last sold 13 months ago as an unrenovated shell for $3.2 million

According to the latest statistics on Home Loans for December 2011, the November and December official interest rate cuts had a positive impact on home buyer confidence and new home loan applications.

“The 2.1 per cent increase in new home loan numbers in the month of December 2011 demonstrates the potential of a  revival in the lending market should the RBA and the banks wish to see one.

If  the banks begin to act independently of the RBA they can potentially do significant damage to the homed buyer confidence affecting both the activity in the property market and demand for home loans.

There was also improvement in lending for established homes in December, with the number of home loans up by 2.3 per cent, demonstrating how a reduction in interest rates affects borrower demand and home buyer confidence.

The recovery in the aggregate number of home loans for first time buyers also took place, with First time buyer home loans comprising 20.9 per cent of all properties financed in December 2011, which compares to 16.9 per cent one year earlier.

The AIG Australian Performance of Construction Index declined to a seasonally adjusted 1.2 points to 39.8 in January, marking the 20th consecutive month that the sector has contracted. This represents an overall reduction in activity of 50%.

This reduction certainly builds the case for more interest rate cuts during 2012. Unfortunately as of February, RBA have decided to keep interest rates on hold. This decision will not assist the housing construction sector in any way.

Low inflation, an uncertain global backdrop and signs of weakness in the job market were expected to validate the cut in the benchmark cash rate to 4 per cent from 4.25 per cent. However this did not occur.

Construction activity was particularly low in the commercial and apartment building sectors.

Consumer inquiries improved as of the end of the year with more people considering to purchase their first home or investment. It is unfortunate that the RBA decision today is not likely to contribute to further improvements in the construction sector.