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Property market's good weekend
Monday, August 10, 2009
PROPERTY analysts are predicting continued recovery in the real estate market after a weekend of strong sales but warn that changes to the Federal Government's first-home buyers grant and the prospect of rising interest rates may slow demand.
Australian Property Monitors reported that 248 properties were up for auction in Sydney at the weekend - the same number that were on the block exactly a year ago.'
APM, which is owned by Fairfax Media, publisher of the Herald, also recorded a clearance rate of 69.3 per cent, compared with just 47.5 per cent 12 months ago. The weekend's listings were also up 15 per cent on the previous weekend, when 205 Sydney properties were listed for auction with a clearance rate of 67 per cent.
These figures suggest to analysts that the market may have rebounded to where it was before the worst storms of the global financial crisis hit last year.
''This time last year, things were very uncertain,'' APM's head of research, Yvonne Chan, said. ''Whereas now, the Australian stockmarket is up dramatically and interest rates are at an all-time low and confidence keeps getting better.
''All of these factors and variables indicate the global financial crisis may well be over. But I must emphasise the words 'may be'.''
The Reserve Bank's cash rate is currently 3 per cent.
There was also a big jump in the value of properties sold. Sales at the weekend were worth $96.5 million, compared with $74.4 million the previous week and $70.4 million for the same time the previous year. The most expensive property - a five-bedroom house in Strathfield - went for $3.7 million; the cheapest, a two-bedroom unit in Mount Druitt, went for $190,000.
In Melbourne, Ms Chan said, the figures were even stronger, with clearance rates at a 12-month high of 87 per cent.
But she also cautioned that the rise in listings and sales may also be seasonal, adding: ''Historically, home owners like to sell in the spring.''
The Real Estate Institute of NSW also said the figures pointed to improved conditions. ''The official data for house prices is showing there is some return to the market,'' said the institute's spokesman, Julian Brophy.
But the real estate industry is also concerned the market may flatline or even fall in 2010 if interest rates climb, as analysts predicted last week, and as the Federal Government reduces the first-home buyers' grant in the last quarter of this year.
- Andrew West
