Last week it seemed sellers had a case of spring fever, with a flurry of auction activity as winter came to a close. This week, while stock levels were not as high, all cities apart from Sydney experienced a clearance rate comeback to healthier levels.
According to the latest RP Data Rismark Home Value Index however, Australia’s capital city property values have slowed considerably, with predictions that prices will continue to show minimal change for the remainder of the year.
Latest auction results from the Home Price Guide show that the consistent clearance rate leader for most of winter experienced a drop in property sales this weekend, with 157 out of 226 properties selling in Sydney to produce a clearance rate of 63%. This represents a 10% decline from the previous week.
Buyers showed renewed interest in both the Melbourne and Adelaide markets, where clearance rates were up from the previous weekend by 4% and 9% respectively. Melbourne’s clearance rate for Saturday was 66%, after 140 out of 209 properties sold, while Adelaide’s was a promising 74%, with 17 out of 23 properties selling.
Brisbane experienced a turnaround in its clearance rate with 50% of the 8 properties reported for auction selling successfully. Of course such a small sample really doesn’t mean anything, so it is not an indication of how the property markets are fairing.
RP Data Rismark’s latest data reinforces what our capital city clearance rates for the past few months have been demonstrating; Australia’s housing markets have entered the slower phase of the property cycle and we can expect prices to remain relatively flat until at least the end of the year.
The Home Value Index recorded a very modest seasonally-adjusted rise of 0.4% for median house prices in July, after a drop of 1.0% in June – the first negative price movement for Australian capital city home values in 17 months.
Commenting on the results, RP Data’s research director Tim Lawless says these figures verify that our property markets have experienced a soft landing after a fast paced recovery during 2009.
“In the period between end 2008 and March 2010, Australian home values rose by 16.3%. Yet monthly growth rates have declined consistently since the start of the year. RP Data and Rismark expect to see the market track sideways over the second half of the year. There is the possibility of modest gains if mortgage rates remain in check and economic conditions continue to improve,” he said.
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