23 Jul Essential property news this week
First up, some positive news on clearance rates. According to Business Insider:
While it may have been driven by weak volumes and poor reporting levels, auction clearance rates in Sydney improved sharply last week, rebounding after tumbling to the lowest level since the GFC in the early July.
It is good to see a change from the usual narrative every week, but not everyone is convinced. AFR too, emphasised that the numbers are due to ‘Nervous’ vendors selling before auction. The writer explains:
The increase in cleared sales this week were all transacted before auction, CoreLogic added.
Regardless of what caused them, so do feel that the low rates are not worrying:
Generally homes that did not sell at auction in Sydney and Melbourne were selling privately two to three weeks later, indicating a slower but “more normal” market, AuctionWORKS’ Jesse Davidson said.
Out of all this negativity, could it be that the road is finally being paved for housing affordability (something that the media was saying was still not happening)?
Meanwhile, another report on the property market has been released in the aftermath of the banking Royal Commission, this time from Deloitte. The crux of it is basically that:
The Royal Commission has uncovered a range of wrongs… the big banks are now running scared – Deloitte Access Economics
The Sydney Morning Herald paints a dire picture this week too, in a piece titled ‘Is the bottom about to fall out of our $6.9 trillion property market?‘:
The Bureau’s (ABS) latest quarterly report clocked national home values falling 0.7 per cent in the first three months of this year, wiping $22.5 billion from Australians’ combined housing wealth.
On to the supposed oversupply. A fresh report from Economic forecaster BIS Oxford Economics has found that:
Over the next two years, the fall in residential building starts will accelerate sharply, particularly in the investor-driven apartments segment, which is set to fall 50%.
So the big question(s) is now, if approvals and builds are low, and population growth is high, are the 20,000 vacant units reported last week such an issue, or can we expect another boom in 5 years?
Have a great week!