487 markets join million-dollar property club: CoreLogic
Australia’s property million-dollar club has continued to grow, as new research shows that more than one in five homes...
According to economist Dr Shane Oliver, Sydney’s falling auction rate is a clear indication that the market has turned.
In AMP Capital’s weekly market update, chief economist Dr Shane Oliver noted that recent CoreLogic data showed a further decline in property prices in October.
“Auction clearance rates in Sydney are now falling towards levels around 55 per cent that are normally associated with price declines on an annual basis and we expect Sydney home prices to fall around 5-10 per cent over the next year or so,” Dr Oliver said.
CoreLogic’s latest figures, released this week, revealed that a clearance rate of 67.4 per cent was recorded, an increase from previous weeks.
However, Dr Oliver pointed to a long-term trend that might suggest that Sydney housing prices have passed their prime.
“Residential property prices in Sydney and Melbourne look to have peaked, with a slowdown likely in the next year or two,” Dr Oliver said.
The economist also noted that Sydney and Melbourne’s property market trends had not been replicated in the country’s other major cities.
He also predicted that the RBA will keep the cash rate at 1.5 per cent for the sixth consecutive month, partly attributing his prediction to a slowing housing market.
“The RBA’s forecasts for stronger growth, along with solid business conditions and employment growth, argue against rate cuts; but ongoing low inflation, record low wages growth, uncertainty around consumer spending, as highlighted by very weak retail sales, [are] signs that the housing cycle is slowing and the still strong [Australian dollar] argue against a rate hike.”
An auction is a public event for the sale of assets and property to the highest bidder among a group of buyers.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.