Price rises as high as 10% have been predicted for major city markets following a resurgence in sentiment and activity in the wake of a series of positive events.
Auction clearance rates in Sydney and Melbourne have had another strong showing and recovery in price levels appears to be under way, while market activity elsewhere continues to respond positively to improving consumer confidence.
AMP chief economist Shane Oliver says we can expect to see as much as a 10% rise in house prices as a result.
He says the worst appears to be over for the Sydney and Melbourne property markets after yet another strong weekend of sales. Clearance rates are the best in around two years for both cities.
Last weekend, 78% of Sydney properties sold and 74% of Melbourne’s sold, according to real estate website Domain.
It marks the sixth consecutive weekend that both capitals have trended above 60% and the second-straight week that Sydney has broken the 70% mark, according to Domain.
The rebound in market activity has been attributed to multiple factors, including:-
- Lower interest rates
- Relaxed lending criteria from APRA
- Tax cuts
- The Federal Election result, eliminating concerns about negative gearing.
The uplift in sentiment and activity has prompted Oliver to predict that prices could rebound by as much as 10% in the two biggest cities.
Other scenarios are occuring in other markets around Australia, with prices still rising in Hobart and Tasmania, parts of Brisbane and Adelaide, and in many locations across regional NSW, regional Victoria and regional Queensland.
There is also evidence in the latest data from SQM Research that price decline has halted in Perth and Darwin.