MELBOURNE (Reuters) - Australia’s housing market has shown early signs of improved buyer confidence at property auctions, according to data from a major analysis firm, days after the country’s central bank cut interest rates again in a bid to boost the sluggish economy.
Preliminary data released by the firm, CoreLogic, showed a national average clearance rate of 68.92% for the 945 properties listed for auction across the country during the first week of July. That was up from a clearance rate of 66.5% for the previous week, when 1,292 properties were listed for sale.
Clearance rates show the percentage of properties sold at auction and is one indicator of the health of the property market.
The higher clearance rate follows the Reserve Bank of Australia’s (RBA) move last Tuesday to cut cash borrowing rates by 25 basis points to 1% in the central bank’s second interest rate cut in as many months.
In Australia’s most populous city, Sydney, preliminary clearance rates hit 78.24% in the first week of July, up from 72% the previous week. Real estate agents Reuters spoke to said it appeared buyer confidence had returned to the market.
“There’s definitely a really good vibe out there in the marketplace now; people just want to get on with it and buy a place,” said Sydney real estate agent Brendon Clark.
Robert Mellor, managing director at BIS Oxford Economics, said that while interest from first-home buyers was up and house price falls seemed to have stabilized, he didn’t expect investors to rush back into the market. Changes in the property market take time to flow through to the rest of the economy, he said.
“Our view is that the economy is still going to be fairly sluggish over the next 12 months or so,” Mellor said on Sunday.
Last week, Australia’s conservative government secured legislative support for A$158 billion ($110 billion) worth of tax cuts over the next decade, the centerpiece of its plan to reinvigorate the economy.
Melbourne-based property agent Matthew Schroeder told Reuters he believed prices had bottomed after seeing good demand for properties in the city’s trendy inner northern suburbs. He said that he had a personal clearance rate of 100% since the government’s re-election in May.
“Buyers now have the feeling lending is as good as it can get and prices have flattened in my opinion - we’ve already hit the bottom and are starting to push up,” he said.
($1 = 1.4329 Australian dollars)
Reporting by Will Ziebell in MELBOURNE; Editing by Kenneth Maxwell