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Is The Property Market Going To Start Recovering?

Is the property market going to start recovering in the later part of 2019?

CoreLogic is a research firm that monitors residential and commercial property prices across Australia.

Is The Australian Property Market Recovering?

Corelogic doesn’t only collate property prices but it also looks at auction numbers as well. The idea is that it can give ongoing coverage about whether the percentage of houses being successfully sold at an auction is going higher or lower.

In the worst days of the property decline over the past year, auction clearance rates in Melbourne and Sydney had fallen to the low 40% range.

Even though the number of homes on the market and the prices had fallen, the number of people wanting to buy had fallen too.

A lot of people were blaming the harsh lending standards shift of National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group (ASX: ANZ), Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA) because of the spotlight of the Royal Commission.

However, since the surprise Federal Election win by the Liberals and Nationals, there are a lot of things that could turn around the property.

For starters, just that Labor won’t be implementing the negative gearing changes was seen as a positive for the property market. APRA has officially implemented its policy of allowing banks to lend with a buffer for the borrower of the current loan interest rate plus 2.5%, and the Reserve Bank of Australia (RBA) has cut interest rates to 1%.

According to numbers reported by the Australian Financial Review, Corelogic has seen a national preliminary auction clearance rate fall to 70.6%.

Although this number normally gets revised down a little as more numbers come in, and it’s at the ‘best’ time of year for property sellers due to limited houses on the market, there does seem to be a bit of stabilising of house prices at the moment.

Are Property Prices Headed Back Up?

I think it’s far too early to say that. We have to at least see what happens over Spring as more sellers come onto the market – some of them may be forced sellers.

It may be a dead cat bounce, or it may be a true end of house price falls. For me, I doubt it’s the last time we see national house prices fall in the monthly CoreLogic report this year.

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