Australian house prices are expected to make a come back as early as July, leading economists say. The housing downturn is expected to come to an end with auction clearance rates higher than they have ever been.
Sydney recorded preliminary auction clearance rates of 69.9 per cent, according to CoreLogic, which is expected to achieve its best final clearance rate for the year adjusting for slippage.
The final rate will likely fall in the low 60 per cent range, compared to the 56.6 per cent the week before. The combined preliminary capital cities rate jumped to 62.6 per cent from 57 per cent the Saturday before.
Australian house prices
Some of the main factors, of course, have been the result of the election giving buyers more certainty about the future as Labor Party’s proposed policies to change negative gearing and capital gains tax concessions are no-longer an issue.
If the Labor Party had got into power and looked to overhaul property policies, it may well be a different story. Australian house prices could have continued on their slump if this was the case.
Along with Scott Morrison’s victory, this gives certainty to home buyers and investors as they look forward to growth throughout the country.
Prudential Regulation Authority
Not only just the election results are a helping factor, but the Australian Prudential Regulation Authority will be removing the guidance that customers should be able to repay their loan if their interest rate increased to at least 7 per cent.
And of course, there is the factor that the Reserve Bank of Australia will most likely cut the cash rate next month could also bring back more buyers to the property market to boost its growth. If this was the case Australian house prices may or may not increase though definitely will bring back buyers to the market.
One of the big factors for those looking to purchase a home is tax cuts, will they and when will they happen. Tax cuts put cash in peoples hands, makes them feel wealthier and predominately potential home buyers will feel more financially secure about purchasing a property.
This will all equate to a rise in property sales
Don’t be fooled though, we are not going to see Sydney or Melbourne jump back to double digits with rapid growth so soon, but there are other areas of Australia that are seeing growth including areas outside Brisbane and the Gold Coast, so shop around there are plenty of great opportunities out there.
Right now, it’s a buyers’ market, but for how long no one knows and as an investor if you are buying at the right price in the right area and you can buy - then there is no better time than now.
Far too many buyers try and wait until the market hits the bottom and then buy, but the problem with that is you never know where or when that will be.
Buyers continue to wait and wait for the perfect moment, but by the time they get back into the market the property market has already been on the rise for several years and you end up being back in a seller's market.
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