The Sydney and Melbourne property markets are showing clear signs of recovery, with auction clearance rates hitting more than 70 per cent in both the capital cities, but, at least for the time being, sellers are still sitting on their hands, according to one expert.
RiskWise Property Research, quoting the latest CoreLogic figures, pointed to Sydney and Melbourne’s clearance rate performances, which came in at 77.2 per cent and 73.6 per cent, respectively.
CEO Doron Peleg said a combination of the surprising election results, the RBA interest rate cuts, APRA’s changes to floor assessment and tax cuts has all contributed to the confidence of the market.
He said the trend now is very clear.
“With interim results in the 60s and 70s in the past four weeks and final clearance rates above 60 per cent for that period, this is significantly higher than the clearance rate of 52 per cent a year ago,” the CEO said.
Mr Peleg said that while volumes are still low, in this context, it means sellers, generally, don’t feel the rush to sell.
“However, further improvement in auction results and the turnaround in the market are likely to lead to an increased volume as sellers expect stronger demand for their properties and, therefore, are more confident to put them on the market.”
Mr Peleg said the high end of the market continued to lead the way, with extremely strong results in Sydney’s Eastern Suburbs with 90 per cent clearance rates, and both Sydney Inner West and Inner South West reaching 87 per cent.
He said that, in Melbourne, the lucrative areas of the inner east and inner south continued, with their consistently strong results this week delivering 77.3 per cent and 76.9 per cent, respectively.
Earlier, CoreLogic said that since 1980 there have been eight separate housing market downturns, and only two have been larger than the current one.
It said that the current downturn which commenced after October 2017 has seen values fall by 6.8 per cent.
“Although that may not seem like a substantial downturn, since the early ’80s, there have only been two downturns which were larger, 2008–09 and 1982–83,” said CoreLogic head of research Cameron Kusher.
“National housing market downturns have also been generally fairly short-lived, with the current downturn of 16 months already the second longest, with the 2010–12 decline running two months longer than the current downturn.”
He said that most of the loss has been felt in the main cities.
“The decline in values throughout the current downturn has been larger across the combined capital cities, with values now 8.6 per cent lower.
“By next month, assuming the falls continue, this will be the largest downturn in the combined capital city index any time since 1980.”
Mr Kusher said the current downturn is also closing in on being the longest.
“With values having peaked in September 2017, they have now been falling for 17 months, with the previous longest period of decline coinciding with the last recession, running for 20 months between 1989 and 1991.”