Taking a Closer Look at the Housing Market

Signs of Hope in the Housing Market

For some time now the auction clearance rates across the nation have been falling. In some instances, below 50%.

But that might be about to change, as the weekend saw clearance rates hit highs not seen since September 2018.

Early property auction results from the weekend indicate clearance rates in Sydney and Melbourne could have crept above 60 per cent, but analysts are cautious about declaring home prices are stabilising.

Data firm CoreLogic said there were 2,041 home auctions across all capital cities, up from 917 during the federal election weekend but down from 2,297 a year ago, and its early tally suggested about 62.6 per cent sold.

The analysis company’s preliminary figures for Sydney indicated 69.9 per cent of homes under the hammer in the city sold — although with only 505 of the 697 auctions counted, 28 per cent of results were still missing.

CoreLogic recorded a 62.9 per cent clearance rate in Melbourne based on the confirmed results of 788 auctions while another 183 were not included in the data.

In Brisbane, CoreLogic counted a 37 per cent clearance rate based on the confirmed results of 92 auctions out of a total of 139 held across the city.

Only 30.8 per cent of auctions in Perth ended in a sale, according to confirmed data from 13 auctions in the city while the results for another 19 were not recorded.

Westpac economist Matthew Hassan said the coalition’s election win — removing prospects of reforms to negative gearing and capital gains tax — and a potential interest rate cut next week may have boosted home-buying sentiment but it was too early to tell.

The extent to which this generates a recovery in housing markets remains unclear. While the initial response is positive, it remains to be seen how ‘follow through’ the move has,’ Mr Hassan said.

There is a chance that this week’s final clearance rate may just be able to hold above 60 per cent after Sydney has seen the final clearance rate sit above 55 per cent for the last 3 weeks,’ CoreLogic commented in its summary.

But given still high house price to income ratios and poor affordability, still very high debt levels, tighter lending standards and rising unemployment a quick return to boom time conditions is most unlikely,’ AMP economist Shane Oliver said.

The CoreLogic summary — which will release its finalised auction results on Thursday — said property prices during the week gained 0.3 per cent in Sydney and 0.1 per cent in Melbourne while prices fell 0.1 per cent in Brisbane and 0.5 per cent in Perth.

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The Australian Tribune Editorial

The Australian Tribune Editorial

The Australian Tribune Editorial

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