Property slowdown set for a rebound, experts predict
Buyer sentiment is boosting auction numbers on the back of the first rate cut since 2020.
ECONOMISTS and housing industry experts are confident the downturn in the property market will be short.
The RBA’s first rate cut since 2020 boosted auction numbers at the weekend and halted a price decline, with analysts predicting an autumn uplift.
“It’s likely to be fairly short and sharp, and given the rate cut, I expect to see a stabilisation or even a modest return to growth,” said CoreLogic Australia economist Kaytlin Ezzy, talking about the slowing market and the return of prospective buyers.
“Some have been on the sidelines because they haven’t been able to get that borrowing capacity to get over the line,” she said.
“We could see more demand and people start to compete for those properties that could help rebalance the scales in favour of sellers.”
SQM Research founder Louis Christopher said the 0.25 rate cut had triggered a boost in buyer sentiment and auction numbers.
“There were more people attending the auctions this weekend,” Christopher said.
“They may have been just sizing up a market, getting their ducks lined up, picking where the value is, working on their budgets.”
The boost in sentiment was much more significant that the cut itself, with buyers now far more confident that rates are headed down compared with a few months ago, he said.
The 2017 to 2019 downturn was gradual, as the bank regulator clamped down on lending to property investors, along with an increase to overall housing stock with the apartment boom.
The 2022 to 2023 downturn happened during one of the sharpest increases in interest rates in a long time, alongside housing affordability challenges.
As the traditional autumn selling season nears, the total volume of listed auctions rose to its highest since the start of December.
Even with that lift, the preliminary success rate was at 72.1 per cent for auctions over the past week, up from 71.2 per cent a week earlier, according to CoreLogic data.
It was the second week running that the national preliminary clearance rate came in above 70 per cent and the highest preliminary success rate since July.
All eyes will be on the clearance rates over the next few weeks.
Close to three-quarters of the 2,820 homes that went under the hammer at auction last weekend were snapped up in the best set of results since last July. The volume slips to 2,540 this week.
