Buyers are back for February, with bubble talk in the news again.
In February, there were in excess of 2592 auctions reported to the Real Estate Institute of Victoria (REIV) with more than 2008 sales recorded. Approximately 584 properties were passed in with 275 of those on a vendor bid. The clearance rate averaged 75.5%.
The clearest trend showing for February is a carryover of last year’s strong market – with keen buyers and the highest clearance rates since mid 2015. Autumn looks likely to continue the trend. Late Summer produced a surge in listings when sellers saw demand was strong – as the market kicked into gear after the Christmas & New Year break. People who missed out last year were in a buying frame of mind.
Melbourne’s inner-south produced the highest clearance rates at 82%, with the northeast and west following at 76%.
A February report in UK’s Daily Mail warned again of a housing bubble in Australia, based on historically low interest rates combined with soaring home prices. According to the author, European economic analyst Pater Tenebrarum, the Australian market (Sydney in particular) was in “the grip of insanity”. Australian property commentators generally dismissed the report’s tone citing Australia’s current economic prosperity as a stabilizer. Interest rate rises are always on the cards, but when they do come, are expected to roll out in increments here, rather than a sudden dramatic increase.
In February local economic analysis also warned of the crippling effects rising borrowing and hidden household debt can have, naming these as a factor in Sydney’s current slowdown.
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