Australia posts strong housing sales activity in April

In April, Australia recorded strong housing sales activity, countering a moderate growth of March. The nation’s housing market is in much better condition at present as compared to late 2015, noted ANZ. But, the activity continues to be weaker than the peak seen in 2015. This is likely to continue through the rest of 2016, according to ANZ. Stronger price gains in Melbourne, Sydney and Brisbane supported the April’s result.

February’s housing finance data indicated that investors are beginning to come back to the market, after a gap following 2015’s macro prudential regulation. Demand is expected to be supported by the recovered sentiment. Demand is thus underpinning house prices. But the regulatory cap on growth of investor lending will restrict the positive effect on price and sales growth as compared to the earlier cycles, noted ANZ.

However, one month of strong result does not make a trend, according to ANZ. Even though auction clearance rates have steadied in recent months, they continue to be lower than recent years’ solid clearance rates. The present rates of auction clearance shows moderate easing of price growth in 2016, added ANZ.