Australia is at the forefront of recovery in the housing sector. The stimulise package provided by the Australian Government is paying dividends
Recently the International Monetary Fund (IMF) upgraded its growth forecasts for the Australian economy, stating “this is because of strong commodity exports, a flexible exchange rate, a healthy banking sector, and a timely and significant macro policy response”. The IMF expects Australia’s GDP to contract by a modest 0.5 per cent in 2009, before growing 1.5 per cent in 2010. The IMF has also suggested that Australian interest rates should remain low for some time considering the “fragile state of the global economy”.
The rosier outlook for economic conditions comes as other key market indicators are also showing an improvement. The average level of vendor discounting (the difference between the initial listing price of a property and the ultimate selling price) has been improving with most cities now averaging a discount level around 6% of the original asking price (7% mid last year) and the average time it takes to sell a property is now generally around 30 to 45 days.
Consumer sentiment, although somewhat volatile, has broken the 100 point mark for the first time in 17 months, housing finance approvals are trending up and market activity has improved. Additionally, the recovery in the auction market has certainly withstood the test of time, with every capital city market showing a substantial improvement in clearance rates over the last two months.
The two largest auction markets, Melbourne and Sydney, have averaged clearance rates of 79% and 73% respectively over the last two months. Compared to the same period last year these markets were averaging clearances of just 50% and 43%.
Locally stock levels are still at a very low rate. Everything is being looked at and bought by first home buyers. Agents are expressing to me that stock levels are at a low in all price ranges. The halving of stamp duty on new homes is certainly going to help with new stock, but leaves buyers without any more insentive to buy. There needs to be discounts on stamp duty for existing homes and for investors.
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RPData Property Pulse
26/06/09
