The recovery in housing values accelerated in August 2019 with national dwelling values increasing by 0.8% over the month, according to the latest research from CoreLogic.
The lift in housing values through August was substantial, with CoreLogic research director Tim Lawless commenting, “The significant lift in values over the month aligns with a consistent increase in auction clearance rates and a deeper pool of buyers at a time when the volume of stock advertised for sale remains low.
“It’s likely that buyer demand & confidence is responding to the positive effect of a stable federal government, as well lower interest rates, tax cuts and a subtle easing in credit policy.”
Sydney dwelling prices rose a strong 1.6% which is the third gain in a row and Melbourne prices rose 1.4%. This is also the third monthly gain in a row for the Victorian capital. Prices also rose in Brisbane (+0.2%), Hobart (+0.5%) and Canberra (+0.8%).
Shane Oliver, Head of Investment Strategy and Chief Economist, AMP Capital said, “The rebound in auction clearance rates points to a rebound in home prices in Sydney and Melbourne – and this is already starting to be seen.”
However, the rapid rebound in Sydney and Melbourne property prices to annualised gains around 15% in August has raised the risk that stronger gains are possible for several reasons according to Shane. “First and most immediately, the Spring selling season is worth watching - if auction clearances remain elevated as listing pick up then it will be a positive sign that the pick-up in the property market has legs.
“Second, housing finance commitments - so far it’s remained weak despite the pick-up in clearances. This may be because many of the buyers who have come back into the market so far already had finance lined up and were waiting to buy. And in any case, it has come on low volumes. For 10-15% price gains in Sydney and Melbourne housing finance will have to pick up significantly.” It’s a clear case of watch this space as spring kicks into gear.