Australia’s housing downturn has reversed after a steady growth month, according to CoreLogic data.
The national Home Value Index posted a 0.3% gain after a shallow three-month downturn.
According to CoreLogic research director, Tim Lawless, improved housing conditions are indicative of improved sentiment rather than immediate improvement in borrowing capacity.
“Expectations of lower interest rates, which solidified in February, look to be flowing through to improved buyer sentiment,” Lawless said.
“Along with the modest rise in values, we have also seen an improvement in auction clearance rates, which have risen back to around long-run average levels across the major auction markets.”
Melbourne and Hobart led monthly gains for capital cities, both experiencing a 0.4% increase, which is on par with regional growth. This rise breaks a 10-month decline streak for Melbourne.
The return to growth in Melbourne and Sydney is driven by the more expensive end of the market after high-value markets in each city recorded the sharpest downturn.
At the same time, mid-sized capitals Brisbane, Perth and Adelaide have lost their titles as the strongest growth markets with monthly changes of 0.2% to 0.3% for monthly growth. Adelaide and Brisbane still lead quarterly growth trends.
For this month, the only capital that didn’t grow was Darwin which had a 0.1% decrease.
The improved market conditions might also be the cause of a slowdown in the flow of freshly advertised "for sale listings".
“Although total advertised supply levels are almost 1% higher than a year ago, listings remain -7.9% below the previous five-year average and the reduced flow of fresh stock to market could be supporting some upward pressure on prices, especially if buyers are becoming more active amid higher sentiment and lower rates,” Lawless said.
