Stability in the federal government, lower interest rates and tax cuts have helped to boost buyer confidence in Australia’s property market, according to property analysis group CoreLogic.
CoreLogic’s Hedonic Home Value Index, released earlier this week, shows housing values recovered by 0.8 per cent last month across the nation. Dwelling values had reached their largest annual falls of – 7.3 per cent in May this year but improved to about – 5.2 per cent across August. The rise in August was biggest monthly improvement recorded in more than two years.
See related: August 2019 HTW Property Clock: Canberra
CoreLogic research director Tim Lawless said it appeared growth trends were gathering pace, with national dwellings values spiking 0.6 per cent throughout the rolling quarter.
“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,” Mr Lawless said.
“It’s likely that buyer demand and 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.”
PropertyMash Managing Director Cameron Black concurred with these sentiments, saying “buyer sentiment continues to improve, notwithstanding continuing negative press. We are seeing increased interest from first home buyers and even investors are slowly starting to return to the market”.
Mr Lawless noted it was the third successive month of capital gain in Sydney, Melbourne and Hobart and the second successive month of increases in Brisbane.
Across August, dwelling values spiked by 0.2 per cent in Brisbane, with median home values reaching $485,493. Canberra recorded 0.8 per cent growth to reach a median dwelling value of $592,870, with the greatest gains of 1.6 per cent and 1. 4 per cent achieved in Sydney and Melbourne markets. The median dwelling value in Sydney was $790,072 and $626,703 in Melbourne last month.
Mr Lawson said that last month’s housing data confirmed the ongoing turnaround since May in housing market conditions.
“We have consistently heard that housing market confidence has improved and the data since then continues to confirm the improved sentiment,” he said.
“At CoreLogic, our expectation has been that this recovery would be a slow and steady one, however, with housing credit restrictions easing and mortgage rates likely to reduce further, this rebound could potentially turn into a ‘v-shaped’ recovery.
“If the strong rises in values continue over coming months, we would not be surprised to see a new round of macroprudential policies introduced in order to keep debt levels in check and encourage spending in other areas of the economy.”