AUSTRALIA STILL THE LUCKY COUNTRY
Australia-still-the-lucky-country
26th June 2009 | category [ Articles ]
Australia is at the forefront of recovery in the housing sector.
The stimulise package provided by the Australian Government
is paying dividends
Recently the International Monetary Fund (IMF) upgraded its growth forecasts for the
Australian economy, stating “this is because of strong commodity exports, a flexible
exchange rate, a healthy banking sector, and a timely and significant macro policy
response”. The IMF expects Australia’s GDP to contract by a modest 0.5 per cent in 2009,
before growing 1.5 per cent in 2010. The IMF has also suggested that Australian interest
rates should remain low for some time considering the “fragile state of the global economy”.
The rosier outlook for economic conditions comes as other key market indicators are also
showing an improvement. The average level of vendor discounting (the difference between
the initial listing price of a property and the ultimate selling price) has been improving
with most cities now averaging a discount level around 6% of the original asking price
(7% mid last year) and the average time it takes to sell a property is now generally
around 30 to 45 days.
Consumer sentiment, although somewhat volatile, has broken the 100 point mark for the
first time in 17 months, housing finance approvals are trending up and market activity
has improved. Additionally, the recovery in the auction market has certainly withstood
the test of time, with every capital city market showing a substantial improvement in
clearance rates over the last two months.
The two largest auction markets, Melbourne and Sydney, have averaged clearance rates
of 79% and 73% respectively over the last two months. Compared to the same period
last year these markets were averaging clearances of just 50% and 43%.
Locally stock levels are still at a very low rate. Everything is being looked at and bought
by first home buyers. Agents are expressing to me that stock levels are at a low in all price
ranges. The halving of stamp duty on new homes is certainly going to help with new stock,
but leaves buyers without any more insentive to buy. There needs to be discounts on
stamp duty for existing homes and for investors.
via RPData Property Pulse