Recent market reports are showing signs of a slow recovery in Australia’s housing market.
CoreLogic’s most recent market report details the continuing slow recovery in Australia’s housing market.
According to the report, the market saw a 1.7% increase in national housing values in the three months to September, the highest quarterly rate of capital gain since June 2017. Melbourne saw a 3.4% increase in dwelling values over the June – September quarter.
Recovery has been seen mostly at the higher end of the market, which has also seen the biggest decline over the past 12 months. Although in general the market is still lower, the annual rate of decline has levelled or started to ease across most cities.
September saw the third consecutive month of rental rate decrease; however the annual rate of rental growth is still trending slightly higher.
Housing stock remains lower than it was a year ago with a national decrease of 20% in sales new stock compared with this time last year. The number of new properties for sale in the 28 days to 29 September 2019 for Melbourne was 6123, an 18.6 per cent decrease compared to October 2018.
CoreLogic also note that first home buyers have been a key source of housing demand due to improved affordability, less competition from investors and other incentives.
Interest rates are also the lowest they have been in almost 60 years. The cash rate fell by 75 basis points between June and October this year.
Conversely, investor activity has dropped nationally over the last couple of years, and still remains low.
Core Logic also notes that ‘high migration rates are continuing to push the national population higher, with growth of 1.6% over the past 12 months ending March 2019 ‘. This growth is comprised of a natural population increase as well as overseas migration.
Auction Clearance Rates
The second half of 2019 has seen clearance rates improve significantly, however the number of auctions being held remains low relative to recent years.
REIV’s Market Insights reports the following auction results for the week ending 6th October:
- Auctions reported week ending 6 Oct: 675 nationally. This time last year: 815
- National clearance rate: 73%. This time last year: 55%
- For Victoria: 390 sold at auction, 102 sold before auction, 1 sold after auction, 174 private sales. 77 per cent clearance rate for houses, 68% clearance rate for units.