The first quarter of 2011 has ended with property markets in both Sydney and Melbourne yet to give clear signals of the direction of activity, according to Dr Andrew Wilson, Senior Economist at Australian Property Monitors
In their latest property report Australian Property Monitors say that weekend auction clearance rates, normally a reliable indicator of market activity have consistently floated around the high 50 percents for Sydney and low 60 percents for Melbourne with no sign of a breakout either up or down from this level over the past month.
This indicates that the market although recovering slowly from the softening evident late in 2010 still remains in favour of buyers, particularly in Melbourne.
The fundamental housing market drivers are however encouraging indicating the likelihood of increased buyer activity through the year.
Unemployment rates are low and growth in full time jobs and incomes continues in both Sydney and Melbourne. Interest rates remain on hold with the expectation of a benign medium-term outlook by the Reserve Bank. The rental market remains tight in both cities with low vacancy rates and upward pressure on rents. New housing construction continues to lag the growth in households.
Latest ABS home loan commitment data for February show a rise over the January numbers for both Melbourne and Sydney although still at levels well below last year.
A clearer picture will emerge in the next few weeks as the pre-Easter auction selling season reaches its crescendo with large numbers of properties being offered in both Sydney and Melbourne.
Source: Australian Property Monitors
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