There's a lot of talk about where the housing market is going to go in the next few months. While no one can predict exactly what's going to happen - we think it's important to stay informed about the current market so you can make empowering financial decisions.
Clearance Rates are Steadily Increasing
According to CoreLogic, clearance rates have improved in the past week with fewer homes being withdrawn from the market. One year ago, the clearance rate was 66.4%, in August this year, the clearance rate was 65.3% (after substantial fluctuation in the past months). Analysts have said that this increase of the rate could point to increasing stability of the auction market due to eased restrictions in some states. However, more fluctuations are likely to occur due to the unpredictability of the market. For the moment, the rate indicates a market more favourable to buyers.
First Home-Buyer Demand is Increasing
Current research has showed that first home-buyer incentives are having a 'vacuum effect - meaning the implementation of the incentives are followed by large, temporary spikes in buying activity. Overall this suggests that the incentives are bringing forward purchases that were going to happen anyway. For the meantime, although COVID-19 has been a reductionary factor in buying, at the very least first home-buyer activity is still being encouraged.
When is it Time to Buy?
Property expert Ben Kingsley noted that the dire predictions of property prices falling 20%-30% no longer apply. Depending how well a second wave of Covid is managed, along with historically low interest rates, Kingsley predicts property will fall only around 5%. Ultimately, it is impossible to know where the 'trough' of the market will be. The time that is best for you to buy is when you feel informed and empowered to make this big financial decision; keeping track of market trends and keeping an eye on properties in the area you're interested in buying in are the best ways to ensure you know what's going on.
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