Australia’s property market is showing slow but definite signs of recovery. Keep reading for a summary of current market trends and predictions.
Peak selling season is approaching, and CoreLogic have released their September property report.
The market has seen the first rise in national dwelling values (a rise of 0.6%) over any three-month period since November 2017.
Capital city home prices rose an average of 1.2% in August, driven by a 1.6% rise in Sydney and 1.4 % in Melbourne. Melbourne dwelling values increased by 1.8% over the three months to August 2019. Melbourne dwelling values have fallen by -6.2% over the past year and they are currently -9.5% lower than their November 2017 peak.
Five of the eight capital cities had price rises, but Darwin (-1.2%), Perth (-0.5p% and Adelaide (-0.2%) continued to fall.
Although values have continued to decline on an annual basis, the rate of decline is now improving across the combined capitals and has stabilised across the regional markets.
CoreLogic also report that home buyers have been a key source of housing demand due to improved affordability, less competition from investors, low mortgage rates and incentives. This is echoed by www.realestate.com.au who note a 25% increase in searches on their website over the past twelve months.
The biggest spike in searches occurred after the results of the Federal election and the last two cuts in interest rates. Following successive 25 basis point cuts to interest rates in June and July, mortgage rates sit at their lowest levels since the 1950s, with another two cuts tipped for the next twelve months.
This, along with an easing of access to finance and income tax cuts is contributing to more favourable conditions for buyers as the spring selling season gets under way.
Paradoxically, market conditions for sellers are also good, with fewer sellers, lower listings and less competition.
Although auction volumes remain low relative to recent years, auction clearance rates continue to trend higher. According to REIV, the week ending Sep 15, REIV reported 625 auctions (193 less than this time last year) with a clearance rate of 77%, 20% higher than last year.
REIV publishes the RMX (Residential Market Index), a residential property price index (RPPI) which provides a current, simple insight into property price trends in Victoria. An RPPI measures the price change of the stock of residential dwellings over time.
As of 8th September 2019, REIV reports that the RMX is currently at 122, an increase of 0.2 per cent since last week. This means the RMX is at the highest level since November 2018.
The RMX House Index increased by 0.6 per cent last week to 124.2. House prices have shown a steady increase in the last eight weeks.
The RMX Unit Index had a growth of 1.3 per cent last week, currently sitting at 127. Unit prices are stronger than this time last year.
A more detailed breakdown of the RMX can be found on the REIV website.
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