Property Market Update – 8 August 2019

Yikes! All the talk about a US vs China trade war is making my head spin. You can’t help but think that a game of chess is happening behind the scenes, and we are but mere expendable pawns in it.

In any event, the Aussie real estate market continues to show signs of improvement in the sense that the decline is slowing in most capital cities. Auction clearance rates in Sydney and Melbourne have firmed, and housing lending is marginally better than it has been (although still underwhelming). Spring is only a few weeks away and everyone is holding their breath to see whether lower interest rates will stimulate some action, or whether global economic uncertainty will cause listing numbers and dwelling prices to remain in a monetary malaise.

I’ve now updated the capital city table based on Core Logics latest housing price index data.

Recall that rather than just looking at dwelling values, I prefer to look to the fineprint of the data to see what’s happening to house prices given they’re the biggest component to what’s driving property prices.

July 2019

June 2019 (base month)

Source: CoreLogic Home Price Value Index Tables (www.CoreLogic.com.au)

Note:
Red indicates a negative value, green indicates a positive value and white is neutral.

↑ represents an improvement, ↓ represents a deterioration from the last month.

Interpretation

You can definitely see a little more green in July than was the case in June. Indeed, every capital city recorded an improved result over the previous month, indicating either price growth or a slower price decline.

Sydney, Melbourne and Brisbane (and surprisingly Darwin) recorded an improvement in every period providing some tangible evidence that there has been a market bottom, and a subsequent attempt at a bounce. Only time will tell if it is a temporary or cyclical bottom, or indeed the start of a new rise in values.

Elsewhere looks patchy, with a decline still happening in Perth, but at a slower rate. Meanwhile Hobart looks to be approaching, or at, the top of its price cycle.

Spring, just a few weeks away, is typically peak season for real estate transactions in Australia and will be a major test to see how the real estate market holds up.

By Steve McKnight

Steve McKnight, the founder of PropertyInvesting.com, is a respected property investing authority as well as Australia's #1 best-selling business author.