Australian House Prices Stabilised in February but Experts Warn Downturn Not Over
The February low stock levels helped slow the fall in house prices, but experts warn it is too early for anyone to predict its downturn.
CoreLogic, a property research company, reported that it Index of home value The February rate decline was the smallest since May 20,22 when rates began rising.
CoreLogic’s research chief Tim Lawless stated that stabilization in prices is associated with low advertised supply and an increase auction clearance rates.
He cautioned, however, that this market recovery would only last for a few days, with the possibility of more rate hikes and a weaker economy.
He said: “We also have to face the fixed rate cliff; arguably the full effect of the aggressive rate hike cycle is still yet to unfold.”
The average listing in Australia’s capital cities was 17% higher than one-year ago and 12% lower that the five year average.
Prices rose in February in Sydney, the capital city. Other cities such as Hobart (1.4%), saw their housing prices drop by less that 0.5%.
Melbourne’s housing prices are almost back at March 2020 levels a year after they fell. They are only 0.3% lower.
Adelaide’s market is at the other end of this spectrum. It has risen more than 40% since COVID began and seems to be resilient to current aggressive hiking cycles.
4 Percent of a “Critical Mark”
Louis Christopher, SQM Research’s managing director, said that his data were in line with CoreLogic numbers.
“This does suggest that the downturn has slowed for the time being. He said that he was still concerned about the possibility of a false dawn in markets. ABC News.
He stated that the 4 percent cash rate was crucial and predicted that if rates were raised above that, it would cause a housing downturn.
“Existing property owners will feel stress when this happens. He stated that prices will drop as we progress into 2023 because of the increase in distressed sales activity.”
Christopher pointed out that they haven’t seen any defaulting mortgages or distress sales at the moment. This situation could change as household savings decrease.
Supply and Interest Rates: Two Major Factors
ProTrack’s home-value index, which reports a rise in all capital cities except Hobart, painted a brighter picture.
Eleanor Creagh from ProTrack, a senior economist, stated that lower stock levels, driving up buyer competition, influenced the slight price increase.
Hobart, however, was the only capital where there were more listings than the five-year average. This gives potential buyers more options and reduces competition.
Creagh stated that prices fell 3.9 percent after the February uplift, but they remain 29.4 per cent above their pre-pandemic level. .
“However, it’s still too early to forecast the end of the downturn.”
She stated that stock will increase in the next months to remove the “Floor” on house prices. However, if supply constraints persist, it could counter the pressure of consecutive interest rate rises.
Yellow Brick Road Home Loans Executive Chair Mark Bouris pointed out that although Australia’s cash rate had increased by 3.25 percent in the past year, there is still a lag around 1.8 percent.
“It is generally agreed that the 180 basis points (or 1.8) of that rate have not yet hit market. This means it is still in lag territory. He said that fixed rates will be coming down in 2023 and are all available to you.
“Assume more falls–that is the bottom line.”
The Reserve Bank of Australia will announce the next cash rate decision on March 7. Expert consensus is for an increase of 25 basis points.
From a-href=”https://www.theepochtimes.com/australian-house-prices-stabilised-in-february-but-experts-warn-downturn-not-over_5096722.html?utm_source=partner&utm_campaign=conservnewsd”>Australian The February stabilization of house prices was confirmed by experts, but they warn that there is still a downturn.
" Conservative News Daily does not always share or support the views and opinions expressed here; they are just those of the writer."
