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Is Australia’s property market bouncing back? September 2019


Hi, I’m Graham the Insights manager at finder.com.au and you know, the RBA didn’t cut cash rates today, it looked dicey leading up to the decision
that maybe they would but in the end they didn’t. So we’re waiting to see what the effects
of the last two records are. The RBA seems to think the economy’s okay for now, here
we’re going to talk about four things to keep an eye on in the Australian housing market
for August 2019. So what’s happened to interest rates for home
runs? Well, as you know, the RBA could buy 50 basis points. But the average code of the
variable rates across the big four banks is only 43. So they kept a little bit back for
themselves. But having said that, those are the big variable rates.There is good value
to be had in the market. Aside from that, we’ve seen rates as low as 2.75% for some
lenders, and all of these lenders on the screen here have sub 3% loans available right now. So there is value to be had for those who are willing to shop around. Bear one thing in mind though, that rates can continue to go down if you get a fixed rate. Next
60% of economist surveyed by Finder, were expecting another rate cut. We asked them last week. Though the RBI statement after today’s hold decision makes it look like maybe we might not see another cut So you know, it’s definitely worth watching
that space and bearing that in mind before you lock in fixed, right. So what’s happening to house prices? Well, last month, we saw three cities experience
positive growth for the first time in quite a while. This month, we’ve seen five do the same.
So Sydney, Melbourne, Brisbane, Darwin and Hobart, who all experienced positive
growth. The numbers are there on the screen. However, it’s worth noting the prices declined
in all other cities so prices fell in Perth, Adelaide and Canberra, meaning the average
growth across Australia is only 0.1%. We asked our economists what they expect house
prices to do over the next 12 months in the Australian capitals. And when we look at the
growth figures, Cambria, top the list oat 2.27% followed by Hobart at 2.19% and Brisbane at 1.81%. These are moderate growth figures But it does show that on average
across the economist’s opinions, some growth is expected. So what’s happening auctions?
Well, I went to my first house viewing in quite a while this weekend in Sydney, for
a small two bedroom home and there was nearly 100 people there. There were queues down the
street, it definitely felt like something had changed in the market. But if we really
want to know if that’s the case, we need to look at the auction clearance rates. Now these
are the percentages of homes on the market that are actually selling. And they’ve been
relatively positive recently that as you’ll see from the numbers on the screen, they’ve slacked back a little bit in Sydney, and they’ve kind of stagnated in Melbourne. So they werelooking a little bit better but now we’re not really quite sure what’s happening there. So is this the recovery or are things looking pretty gloomy? Well, there’s a lot of people
talking about a dead cat bounce in the media, now a dead cat bounce is the last gasp for breath
of dying asset when an economy generally is going down the tubes. So we don’t want that
to be the case. But if we want to know whether we’re looking at a genuine recovery or a dead cat bounce, we need to look at figures a little bit deeper. Now going back to those auction
clearance rates. While the numbers look relatively okay, we need to also look at the
volume of houses for sale on the market. Those percentages are coming from 320 auctions in
Sydney across the last weekend, and 450 in Melbourne. The thing is, if you look at the
same figures for February this year, there was around 700 auctions in Sydney and around
1000 auctions in Melbourne. So there’s a lot of reduced stock on the market. One of
the reasons these clearance rates look pretty high is that there’s quite low volumes of
property on the market. Separate data from Core Logic says a 20% decline in the number
of new properties on the market year on year, but a hole in the overall number of properties
Now what that means his properties are staying on the market for longer, which means potential
sellers are not getting the prices that they want quickly. So these high numbers could
just be an artificially inflated reflection of the low volume of stuff in the market.
So it might not be the true actual value of homes, we really need to see those volume
numbers go up as well as the house prices go up to make a determination as to where
we’re going. However, lenders at the same time are reporting increased number of inquiries
and our website as an increased traffic to the Home Loans inquiry pages. So that definitely
appears to be more interest in the market out there. We have to wait and see what about
Peters into more buying action. So our economists we have surveyed being all over optimistic? Are we heading for recovery? Or are we in the middle of a continuing downturn? Let us know what you think in the comments below. In the meantime, keep an eye on Finder.com.au for continuing news coverage of the economy in Australia.

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