After a five year bull run in Melbourne, the latest CoreLogic Hedonic Home Value Index has shown prices moderated by 1.7% in Melbourne last month. Home prices in Melbourne are still up 0.7% over the past quarter, with annual growth running at 11.5%. CoreLogic’s head of research Tim Lawless told the ABC that May is generally a weaker month for prices as the “laggards” of autumn are sold.
As usual, predictions of future price movements continue to vary from the glowingly optimistic through to the grim. Visiting Citi chief economist Willem Buiter, who’s been forecasting a recession in Australia for at least two years, was the latest to call for doom and gloom, in describing a “quite spectacular” housing bubble. But Lawless said it was too early to call an end to the property boom, particularly after their price data for the first week of June showed a 0.3% increase in Melbourne homes.
With Smart Company reporting healthy population growth of around 2% per annum and a strong economy creating around 73,000 jobs, buyer demand continues to be strong. Auction clearance rates through autumn tracked at a 79.5% average, with the first weekend in June bringing a new winter record in terms of both volumes and results. 1045 properties went under the hammer with a clearance rate of 75.9%, smashing the previous record of 955 set in mid-June 2016 and recording a higher clearance than the 74.4% recorded over the equivalent weekend last year.
The latest data from SQM Research meanwhile has shown the number of properties for sale in Melbourne fell by 1.2% in May, while the average asking price actually rose by 6%. Director Louis Christopher said the number suggests “very robust” market conditions. Interestingly, the total number of properties on the market for sale last month was 19.5% lower than during May last year.
As the colder months set in, market conditions are still eminently strong for sellers, with pent up buyer demand showing little signs of slowing. With an unknown future ahead as always, it’s an opportune time to sell.