Driven by more lenient lending, buyers with increased confidence are chasing fewer listed properties, and the housing market is gaining momentum.
Due to the small number of properties on the market, buyers’ demand has driven up the clearance rate. CoreLogic’s data shows that the preliminary statistics turnover rate was 78.2% in 552 auctions in Sydney yesterday. Yesterday, 388 auctions in Melbourne, the initial transaction rate reached 70.3%.
Nationally, most states are auctioning fewer homes during school holidays and often have fewer homes in winter. For the nationwide auction, the initial transaction rate was 68.9%, and the turnover rate for the fourth consecutive week exceeded 60%.
A week ago, there were 1,295 auctions, with a final turnover rate of 62.9%. A year ago, there were 1,411 auctions with a turnover rate of 52.6%.
Louis Christopher of SQM Research said that according to his observation, since 2001, most housing market recovery has started from a low volume.
He said: “Although the recovery is based on the current small number of properties on the market, I don’t think this is a false recovery.”
“With a variety of factors, the housing market has really recovered in Sydney and Melbourne.”
“The rise in the liquidation rate was due to the unexpected victory of the Federal Election Coalition Party, interest rate cuts, and APRA’s relaxation of credit restrictions, resulting in more and more buyers.”
“The combination of these factors is enough to boost the real estate market and trigger a change in the housing market. Now we have seen the turning point.”
Yesterday, a four-bedroom house in Lane Cove, Sydney, 61 Hinkler Crescent, the final auction price of 2.27 million yuan, a couple of young couples in the West End apartment need to upgrade their homes to buy at a price higher than the reserve price of several hundred thousand, proof The recovery of the housing market.
Belle Lane Cove’s real estate agent Debbie Jeppesen said: “Obviously, buyers are more confident and more willing to raise their hands at the auction.”
“Before the buyers worried that the house prices would fall, they did not dare to take the shot. I think the housing market has begun to show signs of FOMO, especially the current market is not much.
“Today’s transaction price is higher than the reserve price. Although the price has not yet returned to the high level of 2017. But overnight, I saw a fierce bid from the buyer.
The latest house price data shows that housing prices in Sydney and Melbourne have seen positive growth for the first time since the market peaked in 2017. According to CoreLogic, house prices in Melbourne and Sydney increased by 0.2% and 0.1% respectively in June.
In the past week, as the central bank cut interest rates continuously, the federal government passed the 158 billion tax cuts and prudential regulators canceled the minimum 7% mortgage approval rate, lenders’ borrowing capacity will increase by 14%, and the housing market is stimulated by multiple incentives to boost buyer confidence.
Christopher said that the final result of the weekend auction should be within the 60%-70% range after adjustment, and under normal market conditions, this will mean that house prices are rising. The seller has adjusted the asking price accordingly.
“I am convinced that the housing market has entered a recovery period. Christopher said: “The time and magnitude of the uncertain recovery.
“I don’t think the housing market will last long. As far as Sydney and Melbourne are concerned, although the housing market has already bottomed out, house prices are still overvalued.
“In my opinion, the housing market has not risen much, and regulators will once again worry about the market risks that come with it.”
Shane Oliver, chief economist at AMP Capital, said the results of the federal election in May have been a catalyst for many investors to enter the market. Although the effects of tax cuts and loose loans have not yet emerged, they have boosted market sentiment.
Oliver said that the weekly auction clearance rate is one of the most timely indicators of the housing market. Although the transaction volume is still very low, it has already shown the impact of recent positive news.
“In fact, the liquidation rate has risen from about 45% last year to about 65%, which indicates that the housing price recovery momentum will be further strengthened.
“Is it possible that the house price will take off again in the past? I tend to be less likely.”
https://www.afr.com/real-estate/residential/housing-recovery-gains-momentum-20190707-p524w5