- Property prices have risen nationally for the first time since October 2017, lifting 0.8%, according to property group CoreLogic. Capital city home prices were even stronger, increasing by 1% across the eight capitals.
- The resurgence is being led Sydney and Melbourne which have seen the sharpest falls in the last two years, with prices appearing to now be bouncing in both.
- CoreLogic research director Tim Lawless said cheap money, produced by interest rate cuts, tax cuts and easing lending restrictions, had put a floor under prices, as auction clearance rates continue to rally.
The resurgence of Australia’s largest two property markets appears to be gathering strength, helping push national house prices higher.
Australian property prices rose for the first time since October 2017, lifting 0.8% in August, according to CoreLogic’s latest figures.
“The significant lift in values over the month 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,” CoreLogic research director Tim Lawless said in a note.
That was even higher in the cities, with values increasing a combined 1.% in August, lifting in five of the eight capitals. Sydney was the top performer lifting 1.6% in August, and nearly 2% across the quarter. Melbourne wasn’t too far behind, with prices up 1.4% during the month.
The only declines were seen in Adelaide — where previous falls have been relatively modest — and Darwin and Perth which have been consistent underperformers.
It comes after prices nationally fell by more than 5% for the year. Just as those declines were led by Sydney and Melbourne, the bounce is now being generated by those same two markets.
A flood of cheap money has helped pick prices off the ground, according to Lawless.
“It’s likely that buyer demand & 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,” he said.
That’s helped Sydney, Melbourne, and Hobart all notch three consecutive months of gains.
“While the ‘recovery trend’ is still early, it does appear that growth trends are gathering some pace, particularly in the largest capital cities,” Lawless said.
“The rapid recovery across higher valued properties makes sense considering this sector of the market recorded a more substantial correction.”
While softening market conditions certainly hurt investors, there’s a big upside for those looking to buy.
“Although values have fallen across the board over recent years, the larger declines amongst more expensive properties mean that they are relatively more affordable for those looking to upgrade,” Lawless said.
That could now be about to change, however.
Auction clearance rates — the percentage of successful auctions — recorded another blockbuster result.
While the preliminary figures are subject to some small consolidation, early numbers indicate 80% of Sydney and 76% of Melbourne auctions sold.
That will mark the seventh successive week of above 70% rates for both cities. Given that rates above 65% are associated with modest price growth, any increased affordability could soon be erased.
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