The light at the end of the tunnel?
In the latest CoreLogic monthly housing update, Tim Lawless reports that February had a slight reduction in the rate of market decline, with a surge in first home buyer activity across the more affordable end of the market. While it is too early to suggest whether this marks a bottoming out of the market, at the very least the indicator gives some hope that the current downturn in housing values is in fact finite (and maybe not as bad as everyone forecast). If you listen closely you can hear the collective property market trying hard not to begin the big inhale before the sigh of relief.
To make that temptation worse, The Real Estate Conversation reports a significant upswing in Sydney’s auction results in the last week, showing a marked improvement over the previous week. CoreLogic’s Kevin Brogan has suggested that vendors may have begun to recognise the new reality, and have been adjusting prices accordingly. While – again – a single week’s good return is not enough to establish a trend, the interesting thing is that although the year ago clearance rate is still 2% higher, this year there were nearly double the amount of auctions. The same is more or less true of the total auctions in Sydney, Melbourne, Brisbane and Adelaide. The auction clearance percentage is down, but the amount of stock is much higher.
If these developments are marking the beginning of the end of the downturn, Brogan also mentions that the lead up to Easter could be a good test of the strength of the market, as “Most people will want to get their auctions in before the Easter weekend because Anzac Day is right afterwards,” he said.
Providing some context for this, Tim Lawless, of CoreLogic is quoted separately as saying, “Although this is a positive development, the outlook for the housing market will continue to be affected by uncertainty related to the federal election, lending policies and more broadly, domestic economic conditions.”