Rate cuts talk
Another bounce in preliminary auction clearance rates for Sydney according to Domain at 61 per cent, but with Melbourne languishing a bit at 55 per cent.
Melbourne came to down its downturn phase later, and thus may take longer to turn around, with total stock listings sitting considerably higher year-on-year.
There were considerably higher clearance rates reported by Auction Insider and REA Group for Sydney and New South Wales, but since I've always followed Domain I'll continue with that for consistency and reliability.
Across the week CoreLogic reported 59 per cent and 53 per cent for Sydney and Melbourne respectively.
Across the week CoreLogic reported 59 per cent and 53 per cent for Sydney and Melbourne respectively.
The median price of property sold at auction in Sydney has drifted back up to $1,230,000, though there are some notable variances within that figure.
Compared to a year earlier the median price of units sold at auction has moved a little higher, but the median figure is materially lower for houses on tighter serviceability.
This drop has been driven largely (though far from entirely) by illiquid markets at the premium end, with only a small smattering of homes now selling under the hammer at above $3 million.
Another thing you can see for yourself just by browsing through the results is that while A-grade properties are generating plenty of buyer footfall, bidders, and solid sales results, the Bs and Cs have taken quite a hit from the auction market peak of exactly two years earlier.
At the sub-regional level, the strongest preliminary clearance rates this weekend according to Auction Insider were seen on the lower north shore (~90 per cent), with east and inner west also back above 80 per cent, and the weakest out west (~50 per cent).
Source: Auction Insider
Merry Xmas...crunch is over?
So, there's been a notable positive sentiment shift in early 2019, perhaps partly driven by talk of further interest rate cuts.
It's still taking forever and a day to process many mortgage applications, though this is said by some brokers to be improving, while auction volumes and sales are way down on a year earlier.
Source: Domain
But all of this could or should speed up now the Royal Commission has finally passed.
Despite the fears, the final report didn't introduce any further short-term hit to mortgage lending practices, instead focusing on disruption of the mortgage broking industry.
And the the now largely redundant arbitrary caps on investor credit growth and interest-only lending caps have also been removed.
Construction dries up
I think on average I get about a thousand messages a year comparing Australia's housing market to Ireland.
Why the obsession with Ireland, I don't know, but as even some of the more prominent housing bears have pointed out the housing market dynamics really are quite different.
And that's not just in terms of Australia having control of its monetary policy and a free-floating dollar - Sydney and Melbourne are also very different in terms of prevailing construction trends.
While Ireland saw ghost housing estates built speculatively far out into remote areas, the latest readings show apartment construction activity as having collapsed across Australia's eastern capital cities, and supply is set to tighten.
On its own that doesn't mean much, but meanwhile population growth continues apace, jobs growth is still firing in Sydney, and the unemployment rate in New South Wales continues to decline to the lowest level ever, now to under 4 per cent.
While there have been some tweaks to visa processing practices at the headline level, the annual number of permanent and long-term arrivals in Australia hit the highest ever level in December at 832,560, with most headed for Sydney, and then Melbourne.
Short-term arrivals also hit a record high in 2018.
It's important to look at leading indicators, as official credit figures and housing price indices will continue to lag the reality.
Here's finance strategist Redom Syed, himself a leading indicator, over at Property Chat:
Here's finance strategist Redom Syed, himself a leading indicator, over at Property Chat:
Source: Property Chat
One caveat is that as we've passed through the peak of the construction cycle - and with the endlessly ongoing construction of the light rail - increasing congestion has made getting around parts of Sydney unbearable.
And therefore demand for housing is likely to continue intensifying around key train and transport hubs, so that could either have a positive or negative impact dependent upon location.
