Housing market test: Why this weekend’s auctions could determine where property prices go from here
- Housing prices could be set to take a turn based on weekend sales and auctions
- Economist Jason Murphy noted positive indications drawn from Federal Election
- Labor’s loss means no negative gearing changes or capital gains tax changes
- He noted there were close to 2,000 homes on auction, double last weekend
Plunging prices in the housing market could be set to recover with double the amount of properties listed for auction this week from last week.
Already, close to 2,000 homes have been placed on auction across the country, which is twice the number of properties listed last weekend during the Federal Election.
Weekend sales are said to be a strong indication of which way the market will go, and strong sales numbers could indicate a resurgence for sellers.
Economist Jason Murphy wrote for news.com the jump in the number of auctioned homes was one of the many good signs this side of the national vote.
‘Negative gearing changes are out and the change to the capital gains tax are not happening,’ he wrote.
‘These are likely to have a positive effect on prices, but how big will it be?’
Plunging prices in the housing market could be set to recover as weekend sales are said to be a strong indication of which way the market will go (stock picture)
Already close to 2,000 homes have been placed on auction across the country, double the number of properties listed last weekend during the Federal Election (stock picture)
The positive outlook comes amid some of the largest price drops in a decade.
Earlier this year, CoreLogic data showed home values fell 7.2 per cent in the past 12 months.
The plunge was rated as the worst since February 2009, when the market plummeted by 7.4 per cent and the world was thrown into a Global Financial Crisis.
Sydney median prices in April sat at around $780,000, while Melbourne houses were valued at an average of a little less than $622,000.
Though Mr Murphy said the Reserve Bank of Australia’s expected cut to interest rates on June 4 would have a positive flow-on effect to prices.
‘Also, home buyers should soon be able to borrow more, as the banking regulator is permitting banks to use a lower yardstick to figure out if borrowers can pay money back.’
Mr Murphy noted banks had been given the green light to set a lower assessment rate, which would ease home buyer’s access to loans.
He went on to say a boost in property prices and the number of successful auctions would firm confidence in vendors and investors.
Daniel Walsh, the founder of the Your Property Your Wealth buyers’ agent, said confidence was already being restored in real estate in the wake of the election.
Earlier this year, CoreLogic data showed home values fell 7.2 per cent in the past 12 months (stock picture)
Brisbane is tipped to benefit the most with a four to six per cent surge in prices in the next year followed by Adelaide and Geelong which are expected to increase by three to five per cent.
Affordable suburbs with high rental yields will be the biggest movers in the next 12 months.
‘Just today we’ve had a dramatic increase in inquiries,’ Mr Walsh told Daily Mail Australia three days after the election.
Mr Walsh said economic confidence was set to rebound ‘now these crazy policies about negative gearing aren’t going to be coming in’.
During the past year, Brisbane’s median house price has fallen by 1.8 per cent to $532,308, CoreLogic data showed.
Mr Walsh said houses now selling for between $350,000 and $650,000 were likely to increase by four to six per cent during the next year, which could see prices climb by close to $40,000.
Mr Walsh said economic confidence was set to rebound ‘now these crazy policies about negative gearing aren’t going to be coming in’ (stock picture)