Market View: July 2019
July 5, 2019
Two months ago we asked the question: Was that the bottom?
For 18 months the national conversation about property prices has been about where are they going: up or down and by how much?
The difficulty is that property is a slow-moving beast and doesn’t fit very well into a daily or monthly media cycle. It generally takes three to six months for trends to start to become apparent, rather than what happened that day or that week.
You can get indicators, though.
One that a lot of people rely on is auction clearance rates. The logic goes that auctions demonstrate demand and enthusiasm and a high clearance rate is good and a low one is bad.
In terms of clearance rates, the REIV has been registering increasing clearance rates every month since December when they were around 45%. These are now up to 73%. Seen here.
Another indicator is median house prices. CoreLogic has kept a monthly update on median house prices and this is widely reported each month. What hasn’t been reported is the trend, where declines had been levelling out.
Again, median price doesn’t tell the whole story. While CoreLogic reports that prices in Melbourne have declined by 11.1%, Toorak has declined by 30%, while Essendon has increased by 7%.
So, what do these two indicators tell us?
For us, it tells us is that sentiment is changing and green shoots in terms of pricing are starting to emerge, with property prices across Melbourne increasing for the first time since 2017 ‘Sydney and Melbourne property values lift for first time since 2017’. It also tells us that no one ever picks the top of the market and no one picks the bottom of the market. Everyone finds out what is happening next after it’s already happened.
So what does that mean for you? Pick your right time and pick your right project or property and that should give you comfort that you’ve always made the right decision.