The property market is set to deliver a bumper year, following yet another week of solid auction clearance rates.
The sector is increasingly confident ahead of the Spring selling season, with the Reserve Bank likely to keep reducing official rates.
Australian Property Monitors economist Andrew Wilson says Sydney recorded an 81.4% clearance rate over the weekend, up from 75% last week – the highest for this time of year in over a decade.
SQM Research director Louis Christopher told SmartCompany that while number is not likely to be that high – “normally when you get a high clearance rate you see high double digital capital growth” – he also believes the recovery is picking up steam.
“Sydney is having a housing recovery, and it’s picking up pace,” Christopher says.
Until now, Christopher says, investors have been driving most of the market activity. With low interest rates, owner occupiers will be more willing to have a go.
“Agents are definitely seeing more activity, and the sales activity is picking up for all capitals except for Hobart and Canberra,” he says.
“I think we’ll start to see more first time buyers enter the market this year.”
Melbourne is doing just as well. According to the Real Estate Institute of Victoria, clearance rates reached 70%.
Christopher says the only thing that can stop the property market at this point now is higher interest rates, “which won’t happen”.
The Reserve Bank of Australia is expected by some economists – including those from Westpac – to cut rates at next month’s meeting.
Christopher says with higher capital growth and sustained sales, the Spring selling season could be a strong one.
“We’re seeing things pick up more and more now. The market is accelerating.”