With the Reserve Bank cutting the cash rate to a record low earlier this month, there are early signs that the housing market is not going to hit that lows that some predicted last years. This also seems to be boosted by last month’s surprise Coalition win.
In the past week, the national clearance rate for auctions has held above 60 percent for the first time in over a year. In comparison, the same week last year the clearance was at 52 percent. The clearance rate for the week prior was just 48.3 percent, although this figure was likely impacted by the Queen’s Birthday long weekend.
Kevin Brogan, an analyst with CoreLogic, sees this as a sign of a market that is nearing equilibrium. Clearance rates in the mid – to high 60s (and rising) has been a sign of rising prices in the past.
In Melbourne, the clearance rate has been over 60 percent for the last three weeks, its most recent figure being 67.9 percent (CoreLogic). There is also indication of larger numbers of people attending auctions and growing confidence in first home buyers.
Of course, this reflects average numbers across all suburbs; individual suburbs can be very different, especially when considering geographical and socioeconomic factors. Prices in South Yarra have fallen around 30 percent, whereas Cairnlea rose a little over 12 percent. This is consistent with the part of the property market cycle in which we currently find ourselves; there is growth in some areas and prices fall in others during a market that is settling and aiming for equilibrium.
Accrue Real Estate have helped Melburnians reach their property goals for many years and have the expertise in the market to know which suburbs are best buys, regardless of where we find ourselves on property market cycle.