Homebuyers who are seeking a bargain may want to do so soon, as new estimates state that property downturn could end as early as the end of 2019.
It is currently a strong buyer’s market, but it could come to an end with an impending perfect storm of market forces supporting declining prices.
According to housing experts, recent changes, such as the potential culmination of the current credit squeeze, more cuts in rates and the inevitable future of negative gearing, are shifting the direction of the market, which had been forecasted to only bottom out by mid-2020.
This would have a significant effect on sales.
Initial figures hint prices were continuing to decline at a slower pace than in 2018.
The median home price in Sydney had declined almost 14% since the market reached its highest level in July 2017. However, much of the impact was experienced in 2018.
Since January, the decline has been losing momentum, and continues to do so in May.
Weekend auction figures revealed that some buyers have started reacting to the changed conditions. Figures showed that citywide clearance rate reached 69.9% with 505 of 697 auction results confirmed. It is possible for the clearance rate to decline as more results come in, but the figure is expected to be the highest in nearly a year.
Weekly clearance rates have stayed close around the 55% level most of the year.
Auction experts observed that homeowners who are considering upsizing or downsizing could relax. Plenty of them have been playing the waiting game because they were not sure of how Labor negative gearing changes would affect house values. But now buyers are more confident about making a bid.
However, the real test could happen in August when the typically calm winter period for sales comes to a close.
Prices were not likely to begin increasing again at a fast pace like the lead up to 2015 and 2016, and buyers would gain more confidence.
Though underlying factors that are likely to hold down prices for a while longer, the negatives for the market have disappeared.
Signs show the market going flatter, which means there is more balance between buyers and vendors, which is very positive.