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The end of the financial year brings with it the end of an uncertain time for the real estate business, according to The Agency CEO Matt Lahood.
Mr Lahood said the end of the financial year brings with it the close of political and economic uncertainty in Australia, which is “good news” for the property market.
“In my autumn report, I talked about the significant impact the lending crunch had on the property market post the financial services royal commission,” he said.
“But with the major banks adjusting to the new regulatory emphasis and APRA’s [the Australian Prudential Regulation Authority] proposed loosening of mortgage serviceability tests, we are already seeing greater confidence from buyers seeking finance.
“These factors, combined with the June interest rate cut, buyer activity is rising significantly.”
He added that the further interest rate cut to 1 per cent will further bolster buyer confidence.
“The other obvious trigger has been the election outcome, with a majority government elected. We saw a pronounced pause in market activity leading up to the election; this may have been policy-driven, but stability in government is always key to the property market,” he said.
“What these combined events have triggered is a backlog of buyers in the market and a shortage of available housing stock.”
According to Mr Lahood, the market is experiencing strong clearance rates at auction.
He indicated that the month of June ended on a national weighted average of 66.5 per cent, with Melbourne and Sydney hitting over 70 per cent.
However, while clearance rates are higher than the same time last year, overall auction volumes have dipped, according to CoreLogic.
Despite that, Mr Lahood said this quarter is a “prime time” to market property.
“Competition from other homes is low, buyers are out in big numbers and they want to relocate before the end of the year,” he said.
“Buying and selling is normally a 12-week process from campaign to settlement, so ideally, buyers want to purchase prior to spring and be resettled well before Christmas.”
He also mentioned that the looming end to the property value decline, which a number of economists have predicted, will result in the industry’s return to growth in 2020.
“In fact, the end-of-month June home index values show Sydney’s prices increased by 0.1 [of a percentage point] and Melbourne’s prices by 0.2 [of a percentage point]. Though minimal, it is still a positive sign,” he said.
“On the ground, we are seeing a large number of listings coming on for spring across the nation and many buyers in the market currently.”
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