PHOTO: Dwelling values in Sydney, the nation’s largest property market, have risen in each of the past two months, according to CoreLogic Inc.
After a two-year slide, Australian house prices look to have bottomed out, sending buyers flocking back to the market.
Case in point: An auction for a four-bedroom house in the Sydney suburb of Ryde on Saturday attracted about 100 people. Spirited bidding pushed offers A$226,000 above the reserve price, before it finally sold for almost A$1.5 million ($1 million) — a buzz last seen during the boom years.
“A lot more people now are getting concerned that things are going to go up in the next six to 12 months so they’re trying to buy now,” said real estate agent Phil Allison, who handled the sale. As recently as six months ago, it was difficult to elicit a single bid at an auction for a house just around the corner, he said.
The sudden turnaround in sentiment can be traced to three factors: the central bank’s back-to-back interest rate cuts which have pushed mortgage rates to record lows; the regulator’s loosening of mortgage stress tests; and the surprise re-election of Scott Morrison’s government in May, which killed off the opposition Labor party’s plans to wind back tax breaks for property investors.
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