- It is the last auction weekend for 2019
- Though more properties on the market this week, auction clearance was higher, continuing standing robust above 60% and 70% for the 31th and 22th consecutive weeks respectively, with 74%, 73%, and 79% from all three sources
- Australian housing market is strong but the overall economical conditions are not promising
- Reserve bank is considering to drop the interest rate to 0.25% by April 2020 and there is possibility on a QE round as well
2019 Property Market Review
- Price falling hit the bottom in May 2019 after the Federal Election, when auction clearance came back above 60% and never fall back again since then.
- Along with the prediction made in one of our posts in March 2019, the property market started to pick up in September, when auction clearance back into 70% range and now in recovery mode.
- After the historic price falling since 1980, the rebound was actually faster and stronger than public expectation, which thanks to historical low interest rate, low stock on market and eased credit policy over first home buyers.
- Auction clearance now stands robustly above 70% but a lack of momentum to cross over 80%, which may indicates this time is a price recovery with mild and controllable pace but not another booming like previous round.
- For 2020, IL Visual we are likely to see the overall median prices continue catch up and then overtake previous record highs. However this will not come fast. In fact, the pace will slow down as more new listing coming to the market, continuous low confidence in investor sector and weak overall economic conditions and family incomes.
- Given the employment rate and salary level are really sluggish, Reserve Bank may have another interest cut before May 2020. This will give the property market another boost. This may create more concerns over the property bubbles, but that may be what Australian need for our economy not falling into the recession.
- First Home Loan Deposit Scheme will start from the new year, which will provide 5% deposit support for 10,000 first home buyers in 2020.
- High end market (above $2 million), especially above $3 million. properties are rarely affected by lending policies, but more likely to be a reflection of the national economy. High end market is usually a little behind the overall market pace. We would see a little to modest price increase in this sector in 2020.
- Though APRA relaxed the serviceability check for home loans, removing the 7% floor, lenders are still cautious on the absolute quantity of the fund to lend. With more concentration on First Home Buyers, $600,000 to $1M range will be seen a good price jump of 5-8% in 2020.
- House and land packages in outer ring areas of Melbourne surprisingly did not experience any large sharp price drop in last round of price fall. However the turnover dropped significantly. In this recovery round, properties in these areas are leading the increase, which may also provide some hints on future gentrification changes.
Melbourne Weekly Auction Clearance – 07 Dec 2019
- 74% Clearance rate of 1209 Auctions
- 76% Clearance rate of 1250 auctions held last week
- 50% Clearance rate of 957 auctions held this time last year
- 670 Sold at Auction
- 219 Sold before Auction
- 0 Sold after Auction
- 200 Private Sales
- 320 Passed In
- 128 Passed in Vendor Bid
- 63 Withdrawn
- 35 Postponed
- 104 No Results
- 75% Clearance for Houses
- 72% Clearance for Units
- $742M Total Auction Volume
- $165M Total Private Sales Volume
- 73% Clearance
- 48% this time last year
- 1227 Listed Auctions
- 931 Reported Auctions
- 713 Sold
- 47 Withdrawn
- 218 Passed In
- $775,000 Median
- $515.8M Total Volume
- 79% Clearance rate for 941 Auction Results
- 1316 Auction scheduled
- 734 Sold at Auction
- 12 Withdrawn
- 5 Sold prior to Auction
- 187 Passed In
- 3 Sold after Auction
- 1329 Private Sales
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