You may be feeling a buzz of excitement this month around the Australian property market as the effects of a number of economic, regulation and supply factors begin to emerge. This was similarly bolstered by a November SQM Research forecast that saw home price gain predictions, of up to 17% in Melbourne and 16% in Sydney in a scenario that includes a further rate cut, for 2020. Furthermore, CoreLogic’s Home Value Index results (released Monday 2 December) showed an annualisation of the last quarter’s figures would imply a 15% national increase for the next year, while Sydney and Hobart are tracking at the mid-twenty percent range. This, however, does not take into account potential counteractions like increased supply in the market or continued low wage growth.
A quick market overview
Although the volume of settled sales nationally is down -10.5% year-on-year according to CoreLogic, we’re seeing an uplift in property prices and buyer sentiment with prices gaining over 6% in the last quarter for both Sydney and Melbourne. We’re also seeing strong clearance rates across both these markets during November – between 68-74% and 74-80% in Melbourne and Sydney respectively. More moderate gains have been felt in Brisbane, Hobart, Adelaide and Canberra, however they also experienced a milder trough during the downturn. The only two capitals to record price drops were Perth and Darwin.
Overall, the Home Value Index surged 1.7% over November, delivering the fifth consecutive monthly increase and pushing national growth into positive territory at 0.1%.
From peak, to trough to…what?
So what is stoking what is being coined a remarkable recovery from the doom and gloom of the last 12 months? There are some definite factors that are contributing to an increasingly sunny buyer sentiment:
What action can you take?
If you’re looking to buy – with prices increasing in the majority of capitals month on month, getting your pre-approval sorted now means you’re ready to act immediately when the right property presents itself. We support you throughout this process and help you compare over 35 lenders – apply here.
If you’re looking for a better deal – the three rate cuts of 2019 mean increased competition between lenders in a time when home loans are at their cheapest in history. It’s the perfect time to analyse how your home loan is serving your needs, and whether you can use your equity to your advantage. Chat to us here.