The year may have ended on a low note for the property sector but experts believe a pick-up could begin from early next year, bolstering prices.
Auction results from this past weekend showed clearance rates in Melbourne and Sydney in the 50s – as they have been for the last few months.
SQM Research managing director Louis Christopher told SmartCompany this morning the year’s results were “pretty much in line with expectations”.
“We thought at the start of the year we would see a 5-10% decline in the capital cities, and although numbers are still coming in that’s what has appeared to have happened.”
“We have Sydney, which has down a little bit better than that, but certainly you would put other cities into that category including Perth, Brisbane and Melbourne. Those capital cities have fallen into that category.”
Christopher says the downturn in the property sector has been around for 18 months, and warns it may take awhile before any recovery takes hold. However, he points to encouraging ABS data showing housing starts and finance has been improving over the past four months.
“We think there will be a decline in the March quarter next year as well, but that is where it’s going to bottom out.”
Everything depends on Europe, he says. “If all goes well, we should see a recovery in the June quarter of next year. We’ll see some indicators before then of how the economy is going, and hopefully that will continue.”
This past weekend is emblematic of the year’s results in clearance rates. In Melbourne, the Real Estate Institute of Victoria said only 254 properties sold out of 482 on the market, with a clearance rate of 53%.
This time last year, the clearance rate was 62%.
“This weekend is the final one this year with a substantial number of auctions – there are only another 40 auctions scheduled to occur before the end of the year,” chief executive Enzo Raimondo said in a statement.
In Sydney, the city recorded a 50.1% rate, while Adelaide and Brisbane recorded rates of 26% and 28% respectively.
Christopher says these results may continue for awhile, but assuming the European situation doesn’t deteriorate, will improve over next year.
“We’ll see clearance rates go up to the 50s in February, and generally they will pick up from there.”
“It should be noted over the next few months we’ll be getting a few mixed signals from the housing market, but over next year the situation should improve.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
