CoreLogic’s research analyst, Cameron Kusher, has noted that despite a downturn in the property market, “the fact that values nationally fell by less than 10 per cent speaks to the ongoing strength of the housing market”.

He looked back over a 40-year period when he considered that property strength “has culminated in Australia being one of the most expensive places in the world in which to buy property”.

According to Mr Kusher, there have been ongoing signs of improving market conditions since May’s federal election.

Driven by a number of factors, he listed off the “unexpected win by the Coalition in the federal election (which removed uncertainty about changes in taxation policies relating to investment), two 25 basis point cuts to interest rates, tax cuts for low-income earners, and an easing of some of the previous lending restrictions that were in place”.

Acknowledging the naysayers, Mr Kusher outlined how many people are pointing to the very low volume of sales in the market to indicate that market recovery is “not real or unsustainable”.

“While that could very well prove to be true if/when stock levels rise, the truth of the matter is that in a downturn, sales volumes typically fall and, subsequently, the early stages of a housing recovery are usually characterised by low volumes of sales,” he counteracted.

He commented that auction volumes have certainly fallen much more than volumes in the general market. However, “as housing market conditions have softened, vendors have become much more selective about which properties are appropriate to be taken to auction”.

“Notwithstanding that, as we have seen in the past, you can’t say that an increase in dwelling values is not sustainable just because the volume of stock either selling or going to auction is low,” he explained.

The research analyst concluded by saying, “Ultimately, you can only transact that which is actually available for sale. And at this point, there is not a lot of stock available for sale.”

“Of course, as we enter spring, that may change and a higher volume of stock for sale may prove to snuff out any increases in housing values. But at this stage, the improving trend is quite real.”