Falling house prices continue to slow in Australia's two biggest cities, with high clearance rates prompting property analysts to predict a more positive outlook with the housing market to bottom out this year.
The CoreLogic May 2019 Home Value Index report released earlier this week showed the drop in national dwelling values slowed from 0.5% to 0.4% in May - the smallest month on month decline since May 2018.
| Month | Quarter | Annual | Total Return | Median Value | |
|---|---|---|---|---|---|
| Sydney | -0.5% | -2.0% | -10.7% | -7.5% | $776,135 |
| Melbourne | -0.3% | -1.7% | -9.9% | -6.8% | $619,804 |
| Brisbane | -0.5% | -1.4% | -2.3% | 2.0% | $484,882 |
| Adelaide | 0.2% | -0.2% | 0.4% | 4.6% | $431,702 |
| Perth | -1.0% | -1.8% | -8.8% | -5.0% | $436,090 |
| Hobart | -0.4% | -0.7% | 3.4% | 8.5% | $445,235 |
| Darwin | -1.6% | -3.3% | -8.6% | -2.5% | $393,298 |
| Canberra | -0.2% | 0.2% | 2.4% | 7.0% | $587,583 |
| Combined capitals | -0.4% | -1.7% | -8.4% | -5.0% | $592,135 |
| Combined regional | -0.2% | -1.0% | -3.0% | 1.8% | $377,462 |
| National | -0.4% | -1.5% | -7.3% | -3.6% | $519,537 |
CoreLogic Index results as at May 31, 2019 Source: CoreLogic
CoreLogic head of research Tim Lawless said the drop has been primarily driven by a slower rate of decline in Sydney and Melbourne, where housing values were previously falling at the fastest rate of any capital city.
"Sydney values were 0.5% lower over the month while Melbourne values were 0.3% lower; the smallest decline in values across both cities since March last year," he said.
This slower rate of decline is further evident in the recent higher auction clearance rates. Overall for May, Melbourne's clearance rates have sat at an average of 56% each weekend - the highest results since May last year, while Sydney's clearance rates push the 60% mark the first time in a year.
Domain economist Trent Wiltshire said the results were a sign the market could be close to a turning point.
"Clearance rates are now at their highest point in a year, and other signs also point to renewed buyer interest – more people are attending open for inspections and auctions and more people are inquiring about home loans,” Mr Wiltshire said.
While the housing market remains in a general downturn, the outlook was more positive now than it was before the federal election, according to Mr Lawless.
Related: What the Coalition win means for the property market
“The federal election outcome has removed the uncertainty surrounding taxation reform which should see an improved level of confidence among home owners and prospective buyers, particularly investors,” he said.
“We now have some certainty around the initiatives announced in the federal budget, a consistent commission structure for mortgage brokers, and the eventual stimulus for first home buyers in the form of a federal government deposit guarantee, which although limited to 10,000 participants with at least a 5% deposit, will kick off in January next year.”
The Reserve Bank of Australia (RBA) is forecast to cut interest rates on Tuesday for the first time since August 2016, with the expected outcome a positive influence on the housing market.
The market may be turning, so if you're thinking of selling, now could be a good time to start the conversation and get equipped with the right information. Book a free, no-obligation appraisal with your local Upside agent today and find out where you stand in the market.