Powered by MOMENTUM MEDIA
subscribe to our newsletter sign up

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Investors cautioned: housing upturn on 'last legs'

Investors, including SMSF trustees, should be aware that several indicators, including a consistent drop in Sydney auction clearance rates, suggest Australia’s housing upturn could be set for a downturn.

In his latest Market Insights piece, BetaShares chief economist David Bassanese said the housing upturn is “losing its steam in Sydney” with the biggest indicator the fall in auction clearance rates.

“Weekly clearance rates have consistently dropped in recent months to be under 60 per cent, compared with peak levels of almost 80 per cent,” said Mr Bassanese.

“Clearance rates are reaching levels at which Sydney house prices will likely stop rising before long.”

Advertisement
Advertisement

Growing land shortages, rising rental vacancy rates and flatter property prices will further undermine developer incentives to boost supply, he said.

The rate of building approvals is another factor suggesting weakness in the property market.

“The real value of quarterly building approvals is already at a relatively high level and more timely monthly approvals suggest a peak has already been reached,” Mr Bassanese said.

“[This] suggests that [a] lag before a topping out in approvals feeding through into a downturn in housing construction is not especially long – at most one or two quarters.”

Investors cautioned: housing upturn on 'last legs'
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Anonymous - It means they won’t be stealing my tax refunds and cutting my retirement income by 30%....
Anonymous - Sorry ... 2 years de facto equals marriage and you can be carved up. This is Lionel Murphy’s no fault divorce where men are asset stripped and.......
Anonymous - The confiscation of Imputation Credit has been stopped, thanks to the Liberal minded Aussie voters that stand up to correct the inequality so that the.......
Cheryl k - Seems a no brainer
If you want small /medium size business to grow and employ more people vote liberal
If you want to be a self funded retiree vote.......