The last quarter of the year proves to be a busier-than-expected one for Australia’s housing market if the figures from August are anything to go by.
Two interest rate cuts, tax cuts, reduced uncertainty about housing, more positive media and easing in the overly tight lending guidelines have combined to generate significant improvement.
Sydney and Melbourne property markets are especially fighting back, while Brisbane’s has stayed relatively strong throughout.
In fact, across the country, August figures show that this was the first month-on-month rise in the national index since values peaked in October 2017 and it was the largest monthly lift since April 2017.
Dwelling values increased over the month across all capital cities except for Adelaide, Perth and Darwin, with prices rising by more than 1 per cent in Sydney and Melbourne.
We take a look at this upturn in Australia’s biggest state capitals.
Since bottoming out after the election in May, Sydney’s housing values have recovered 1.9 per cent over the three months following.
The recovery trend appears to be most concentrated across the premium end of the housing market, while apartments are showing a stronger performance relative to houses. Unit values are up 2.5 per cent since May, compared to a 1.6 per cent rise in house values.
This all culminated this weekend, where the city recorded its best numbers since November 2018. A total of 939 properties went under the hammer, with 77.7 per cent selling, compared to 43.8 per cent of 608 Sydney auctions on the same weekend last year.
While that preliminary clearance rate will come down when the final figures are released later in the week, they do suggest Sydney's property market is improving and, along with Melbourne, helping drive the national average higher.
Although the Victorian capital took a backseat this weekend due to the AFL Grand Final, the recent upturn in the housing market allowed for a weekend off.
Melbourne’s housing values posted its third month-on-month rise, ticking 1.4 per cent higher in August.
After falling by 11.1 per cent between November 2017 and mid-2019, the market has recovered 1.8 per cent.
Similarly to Sydney, the recovery is more noticeable at the expensive end of the city’s housing market, with values across the top quartile increasing by 2.7 per cent per the past three months compared with a 1.4 per cent upturn in the lower quartile.
Overall, Melbourne property prices are leveraged by a robust economy and Australia’s strongest population growth. The city still rates as one of the fastest growing large cities in the developed world and this should only aid its housing market.
Although not as prominent as Sydney and Melbourne, Brisbane housing values have posted their second consecutive month of subtle gains.
However, the city’s property downturn was much more shallow compared to the other big two capital cities, with local values only 2.5 per cent below their peak.
Brisbane dwelling values tracked 0.2% higher in both July and August. Unit values have led the improving conditions, rising by 1.5% over the three months ending August, while house values remain relatively flat at -0.2% lower over the same period of time.
With migration rates lifting, supply under control and generally healthy levels of housing affordability, the Brisbane housing market fundamentals are looking healthier compared to most other capital cities.