Decline in Australian property values slows down, suggesting prices could recover
In a positive sign for the property market, national dwelling values lost just half a percent in April.
The latest data from CoreLogic's Home Value Index suggests that property price falls are slowing. The bottom of the market may be in sight.
In December 2018, national dwelling values fell 1.1%. In February 2019, they fell 0.7% and now the latest April figures show a rate of 0.5%.
There are a few signs that the market is starting to improve, albeit weak ones. Auction clearance rates are reasonably healthy, hovering around 50% (though with much lower volume than previous years). CoreLogic has also seen a rise in mortgage valuation activity. According to the ABS, lending for owner-occupier finance (home buyers) actually rose 2.7% in February.
"While none of these indicators could be described as strong," said CoreLogic Head of Research Tim Lawless, "the current trend in the data implies that housing market conditions may have moved through the worst of the downturn."
But Lawless cautioned that a recovery would be slow. "Although the rate of decline has moderated, we are still seeing values falling across most regions of Australia, and any recovery of dwelling values is likely to be a long term outlook."
With high numbers of properties for sale in capital cities, it is still very much a buyer's market.
Regional areas of Australia are performing better overall. Values in the Riverina region (NSW) have risen 6.4% in the last twelve months. Values in Ballarat have risen 5.9%.
Lawless also said that "there are some tentative signs that credit flows have improved," a positive sign given that stricter lending criteria was one of "the primary catalysts for the housing market downturn."
And then there's the looming possibility the RBA will cut the cash rate this year. A lower cash rate would see lenders putting variable mortgage rates even lower, effectively making it cheaper to borrow money for a home and strengthening the market.
And it's something more of the experts in Finder's cash rate survey are starting to predict.