Australia’s home prices rise again in sign of market bottom
2023.04.30 23:14
© Reuters. FILE PHOTO: Two buyers look at models of apartments on sale at The Parkside, in Macquarie Park, Sydney, Australia, February 25, 2023. REUTERS/Stella Qiu/File Photo
SYDNEY (Reuters) – Australian home prices rose for a second straight month in April, in a further signal that the nation’s property market may have hit a floor ahead of a central bank rate decision on Tuesday.
Figures from property consultant CoreLogic released on Monday showed prices nationally rose 0.5% in April from March, when values were up 0.6%, indicating Australian home prices may have bottomed out after slumping 9.1% from May 2022 to February.
Sydney, the capital of Australia’s most populous state New South Wales, led the way in April, with prices rising 1.3%, while in the capital of Victoria state, Melbourne, they ticked up 0.1%, the data showed.
CoreLogic research director Tim Lawless said prices were “stabilising or rising” across most parts of Australia, and there was a good chance consumer sentiment would improve, boosting housing purchases and sales, as interest rates looked more stable.
“Other indicators are confirming the positive shift,” he said. “Auction clearance rates are holding slightly above the long-run average, sentiment has lifted and home sales are trending around the previous five-year average.”
Adding to improved prospects for the housing market, the Reserve Bank of Australia (RBA) is tipped to hold its interest rate unchanged on Tuesday for a second straight monthly meeting, a Reuters poll of economists showed last week.
Gareth Aird, head of Australian Economics at Commonwealth Bank of Australia (OTC:), said the headwind on property prices from interest rates ratcheting higher had largely run its course, given we were almost at the top of the RBA’s hiking cycle.
“We no longer expect our long held forecast for a national decline in home prices from peak to trough of about 15% to come to fruition. We now expect home prices to rise by 3% in 2023 and forecast a further increase of 5% in 2024.”
CBA have the country’s largest mortgage book.
Shane Oliver, chief economist at AMP (OTC:), also no longer expects a top-to-bottom fall of 15-20% in housing prices, citing “a far worse property demand and supply imbalance” with immigration levels surging and supply remaining tight. He now forecasts prices to be up slightly this year.
PropTrack data on Monday showed that home prices rose 0.14% in April, bringing the cumulative increase this year to 0.75%.
