Australia’s housing market bounces back, with a $2,000 weekly price increase

Experts predict a stable increase in housing prices over the coming years, possibly ending Australia’s housing slump

Sydney, Australia. ThorstenRust/Shutterstock

The real estate market in Sydney and Melbourne has started to bounce back, after gaining AUD3,000 (USD2,000) and AUD2,500 weekly increase respectively since September, news.com.au reported, citing the latest Business Outlook from Deloitte Access Economics.

Despite home prices dropping to AUD2,000 a week in both cities from late 2018 to early 2019, Deloitte predicted that Australia’s housing market prices will keep increasing, as auction clearance rates and housing-related lending begin to experience boom time.

The report said that the rebound in housing prices will eventually boost housing and retail construction, but it could also disrupt the affordability of housing down the line, eventually affecting New South Wales’s economic and population growth.

Fortunately, Deloitte clarified that the market won’t fall back into the property bubble. “Some of the current rebound in housing prices is happening simply because the mood among buyers has recovered faster than sellers have rejoined the market,” the report said.

More: Australia needs one million social, affordable homes by 2036

The steady increase in auction clearance rates indicates a 10 percent jump in Sydney and Melbourne home rates in the coming years, but Deloitte said that it is not likely.

Sydney was the primary beneficiary in the previous housing boom that lasted for about six years, with rates increasing to 70 percent from November 2011 and 2017, based on realestate.com.au.

Since then, housing prices have cut back to about 12 percent, but the real estate market is now on its way to recovery.

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