Short summary is below.
Melbourne and Sydney observations:
– neither markets are really buyers markets or sellers markets at the moment, there’s something for everyone
– stock levels remain very low, and clearance rates are therefore particularly high
– stock levels tend to increase c 6 months after signs of high clearance rate data
In terms of the other capital city markets:
– Perth is still falling
– Adelaide has had a good run but has now flattened
– results for Brisbane have been mixed (detached housing has done well, apartments have been weak due to oversupply issues)
Interest rates:
– interest rates were kept on hold last week at the September RBA meeting
– the 2 x recent RBA rate cuts have been one of the big factors to increase buyer confidence
– Macquarie’s view is that interest rates will fall by a further 0.50%, but timing remains uncertain
– further reductions in interest rates should support house price growth, but global risks to the downside are still concerning and could negate this (the big concerns being around the trade war, Brexit, the HK crisis and Iran)
What’s expected over the next 12 months
– in the absence of global shocks plaguing the market, Macquarie is fairly bullish…
– Macquarie forecasts national house prices to increase c 5% over the next 12 months
– Macquarie forecasts Sydney and Melbourne to increase c 10% over the next 12 months
– this isn’t consensus, most people are forecasting more moderate growth, mainly due to restrictive lending
– Governor Lowe does not appear worried that despite low interest rates housing credit growth could pick up to the extent that it becomes problematic.
Please watch the full video for further details.
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