Home prices have recorded their first rise since October 2017, with national dwelling values increasing 0.8% over August, according to the latest CoreLogic report.
Housing values across capital cities rose by 1%, with Sydney (1.6%), Melbourne (1.4%), Canberra (0.8%), Hobart (0.5%) and Brisbane (0.2%) leading the way.
While the lift in annual housing values is substantial, the recent growth is a continuation of the trend seen throughout the year whereby value falls were consistently losing momentum, and have now started to rise.
Indeed, while Adelaide (-0.2%), Perth (-0.5%) and Darwin (-1.2%) recorded losses, the figures are a substantial improvement on what the three cities recorded over the last quarter and year.
Likewise, while the combined regional figure was -0.1%, this was much better than the quarter (-0.6%) and annual (-2.9%) figures recorded for that market.
What’s driving the improvement?
The significant lift in values in August aligns with a consistent increase in auction clearance rates and a deeper pool of buyers at a time when the volume of stock advertised for sale remains low, says CoreLogic research director Tim Lawless.
“It’s likely that buyer demand and confidence is responding to the positive effect of a stable federal government, as well as lower interest rates, tax cuts and a subtle easing in credit policy,” says Lawless.
“While the recovery trend is still early, it does appear that growth trends are gathering some pace, particularly in the largest capital cities.”
Is a big bounce nigh?
Lawless says while he had previously believed the housing market recovery would be a “slow and steady one”, this might not necessarily be the case.
“With housing credit restrictions easing and mortgage rates likely to reduce further, this rebound could potentially turn into a ‘v-shaped’ recovery,” Lawless says.
“At the outset, it appears that a rapid recovery would confirm that low interest rates and a loosening in credit policy is reigniting some market exuberance.”
The spring selling season will be a timely test of the market’s depth.
“A key contributor to the housing recovery has been the increase in buyers, but also a lack of advertised stock. As stock levels continue to rise throughout spring, we will get a much better understanding of the depth of the current recovery,” Lawless says.
“As listing numbers and auction volumes rise, clearance rates may soften if buyer demand doesn’t lift to match the increase in supply.”
Interested in jumping in?
These latest figures indicate that the housing market recovery is underway, so if you’re interested in making a purchase, then please don’t hesitate to get in touch.
As mentioned above, spring tends to bring more properties onto the market, so if you’ve got your eye on one, let us know and we’ll be happy to help you obtain finance for it.
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