A growing number of positive indicators are emerging from the real estate industry, providing confidence that the worst may be over for those markets that have been in decline for the past 12-18 months.
It’s worth noting that not everywhere in Australia has been in downturn lately.
Far from it – our latest quarterly analysis of sales activity shows 20% of suburbs and towns have rising sales volumes and another 22% have consistent buyer demand.
Only 11% of locations in our national analysis were classified as declining markets.
And some of the notable markets that have had negative trends are now showing signs of improvement, notably in Sydney.
The more positive trend is showing up in improved auction clearance rates and in the price growth data.
The national clearance rate rose steadily in February to reach 70% and the clearance rates for the major capital cities have remained above 70% throughout March.
Price data from PropTrack, the research arm of realestate.com.au, shows that six of the eight capital cities recorded increases in house prices during February, while CoreLogic recorded the first positive price growth outcome for Sydney in 12 months.
All indications are that the price data for March will be even more positive.
This is happening despite multiple consecutive interest rate rises by the Reserve Bank – and puts the lie to the claim by many economists that rising interest rates means prices falling everywhere.
Frankly, this is kindergarten analysis by the major economists of Australia, including the ones with fancy titles at the big four banks – who, based on their track records, are among the worst forecasters of property price outcomes in the nation.
At Hotspotting we believe there are other, bigger, more important factors in play, other than what’s happening with interest rates.
And the biggest of those factors can be encapsulated in one word: shortage.
Not only do we have the most serious shortage of rental properties ever recorded in Australia, but there is also a significant under-supply of homes available for sale.
This is the most common complaint from real estate professionals across the nation, be they selling agents or buyers agents or investors – that there is very little stock on the market.
The shortage of listings is a key reason why prices have remained solid in most markets across Australia over the past 12 months and have not collapsed in accordance with the dire predictions of economists and journalists.
Some markets, notably in Perth, Adelaide and Darwin, have continued to record strong sales activity and price growth throughout the past 12 months and its repeated interest rate rises.
And, for those locations with less positive outcomes, the evidence continues to emerge that the tide is turning.
