Head of Research at RP Data / Core Logic Tim Lawless said:
“It’s becoming increasingly clear that the housing market rebound is gathering pace, both geographically and across the broad valuation cohorts, off the back of lower mortgage rates and improved access to credit, as well as an improvement in affordability relative to the market peak several years ago and consistently high demand via population growth.”
“Demand for housing is responding to stimulus measures, including mortgage rates that are now lower than anything we have seen since the 1950’s and improved mortgage serviceability tests following APRA’s decision to adjust the minimum interest rate serviceability rules in July this year.”
Accompanying the trend towards higher housing values has been an increase in sales activity. Although the annual number of settled sales remain around 17% below the decade average, there has been a clear upwards trend in buyer activity since June.
Mr Lawless said, “There has been a shortage of new listings for several years which has likely resulted in some pent up demand from home owners looking to sell. Despite the improved selling environment, new stock additions remain low for this time of the year, which is likely a reflection of ongoing uncertainty and low confidence.”
“Measures of consumer sentiment have been trending lower, with households reading through the low interest rate setting to the underlying weakness in Australia’s economy. Buying and selling a home requires a high degree of commitment which becomes much harder when there are doubts around household finances or job prospects.
“In addition, total advertised stock levels are 11% lower relative to last year and tracking at the lowest level since 2010. Such a small pool of available stock against rising buyer demand is creating some competitive pressure amongst buyers which is adding to urgency in the market and supporting upwards pressure on values.”
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