While it’s been a sluggish few months across the Australian residential market, there are good signs that most markets are seeing increased activity which is positively impacting values again.
The first and second home buyer market has improved, with auction clearance rates well up on previous months and investors returning to the markets. Most of Australia’s capital cities have recorded a rise in dwelling values over the past three months, with the only exceptions being Perth and Darwin, where values have been trending lower since mid-2014.
Across the other capital cities, Melbourne is on track to stage a full recovery the earliest. If the current run rate of growth continues, Melbourne’s housing market will recover in January 2020.
Brisbane is showing the next fastest recovery time frame. The past three months of gains (+1.1 per cent or 0.4 per cent per month) has put Brisbane housing values on a path to recover within the next 4 months.
Sydney’s housing market is on track to post a recovery within six months, or around April next year if the current pace of growth continues. Housing values are trending higher rapidly, up 5.0 per cent over the past three months.
A recovery in the housing market should help to provide some support for Australian economic conditions, boosting household wealth which will potentially lead to improved confidence and a greater willingness from households to spend. This should also support the residential building and development sector.