The lower end of the residential market is important because it “fuels” the entire market. Vendors selling a lower priced home often purchase a more expensive one, and the chain reaction filters up the market. The lower end is usually active, partly because there are 2 distinct categories of Buyers; First Home Buyers and Investors. At least 1 of these groups is usually active.
This was not the case in 2010 because banks required large deposits and had strict lending criteria, which slowed the First Home Buyer market, and Investors nervously waited for the tax and depreciation changes in the 2010 budget, then were slow to re-enter the market.
The good news is that banks have relaxed their lending criteria for Home Buyers, and Investors are re-entering the market as they see rents rising, and the depreciation changes being minor.
The lower end of the market has responded, and is a lot more active than it was, fueling the entire market. Long may it continue!
Kind regards, Michael