- Home prices were flat last week across Australia, according to data from CoreLogic
- Prices have been trending lower recently, led by Australia’s largest and most expensive housing market, Sydney
- Recent strength in auction clearance rates points to a potential acceleration in annual house price growth in the months ahead
Australian house prices were steady last week, bucking the trend seen since late last year.
As seen in the table below from CoreLogic, prices were flat across the country on an average weighted basis, including in Australia’s largest housing market, Sydney, which has led recent price declines.
Aside from a 0.1% gain in Brisbane, prices were flat across Australia’s remaining mainland state capitals, a result that coincided with another solid increase in auction clearance rates despite a strong lift in properties that went up for sale.
While providing tentative evidence that house price declines may have stalled, it’s still far too early to determine whether this is the start of a turnaround for prices.
As the saying goes, one week does not make a trend.
Reinforcing the need for caution, prices across the country still fell by 0.3% over the past month, led by a 0.6% drop in Sydney.
Prices in all other capitals also weakened by 0.1% apiece.
Reflecting that prices were growing substantially a year ago, annual growth across the capitals slowed to 2%, down from 2.4% a week earlier.
In Sydney, prices have now gone backwards over the year, joining Perth where the median dwelling price fell by 2.7%.
Elsewhere, price growth in Melbourne slowed to 6.9% while gains of 2.2% and 1.9% were reported in Adelaide and Brisbane respectively.
While from an annual basis price growth continues to slow, the recent pickup in auction clearance rates suggests that trend may reverse in the months ahead should clearance rates continue to hover around current levels.
“We think there is already evidence that the slowdown in house prices is stabilising,” said David Plank, Head of Australian Economics at ANZ Bank, before today’s release.
“Base effects mean the annual house price figures will continue to slow for a while yet even if monthly prices are stabilising, but we would caution against focusing on the annual change over the seasonally adjusted monthly move as it will mean that turning points are missed.
“Importantly, the stabilisation of the monthly house price data [in seasonally adjusted terms] is consistent with the stabilisation in the auction clearance rate.”
As seen in this chart from ANZ Bank, there’s a more than reasonable relationship between clearance rates and annual house price movements in Australia over the past decade.
Given data on clearance rates and prices released today, it suggests that the housing market may have reached a turning point.
Time will tell if history will repeat.