Housing Slump Coming To An End

Posted on 14/05/2019  
Housing Slump Coming To An End

All signs point to an early bottoming out of the housing markets in the major cities, according to the Financial Review.

Corelogic's monthly home price data has shown a consistent easing in house price falls this year, suggesting the worst of the price falls are behind us. Vacancy rates are low and falling in most of the capital cities and there is solid rental growth in six of the eight capitals.

SQM Research’s latest data shows annual price growth in Canberra, Hobart, Brisbane and Adelaide and improved figures (though still slightly negative) for Perth and Darwin.

“When you add this to other crucial data points, such as historically low unemployment and historically low interest rates, it begs the question as to whether the economic outlook is skewed too far in the pessimists' favour,” the Financial Review says.

In January national home prices (the average situation, according to CoreLogic) slipped 1%, in February 0.7%, in March 0.6% and in April 0.5%. “The trend is clear and it's happening in Sydney, too - the biggest market,” it says.

The cash rate is at a record low of 1.5% and banks have been making “out of cycle” reductions in their mortgage rates.

Unemployment is still low at 5% and there is enough employment growth to at least see wages increasing at 2.3% (even more if you add commissions and bonuses).

As well, population growth has been increasing at an annual rate of 1.6%, which has been consistent for the last eight quarters.

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