Premium Real Estate Assets Tipped To Fuel Recovery Of Property Market

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River views of Brisbane CBD seen from Kangaroo Point, Queensland in April 2019
River views of Brisbane CBD seen from Kangaroo Point, Queensland in April 2019 Kgbo | Wikimedia Commons

There are faint signs that the Australian property market is headed to recovery, among them the gradually stabilising conditions of the housing sector. In recent months, sales of million-dollar properties have been showing promising indications of improvements.

According to property analytics firm CoreLogic, the latest housing data pointed to a marked uptick in sales of “the most expensive properties,” in Australia, specifically in Sydney and Melbourne, which are the biggest real market in the country.

If the upward trend will continue, CoreLogic said further improvements can be expected over the coming year.

Of note, when the housing downturn occurred in 2017 it was the premium property sector that bore the brunt of the crash. And it will be the same sector that will first reap the benefits should a turnaround plays out, experts said.

“During the growth phase, it was these same properties that were also recording the highest rate of capital gain,” CoreLogic told Yahoo Finance.

However, the firm stated that it would be unrealistic to anticipate a return to pre-downturn levels too soon. Premium home sales are unlikely to speed up the overall market’s recovery.

Home prices are not seen to return to previous levels anytime soon, and in the same way growth figures for real estate at large are not expected to be registered over the short term.

It might be that Australia’s mortgage rates are at its lowest levels in decades but the property market rebounding at accelerated pace could be restricted by a number of factors. And one of them is the “ongoing tightness in housing credit.”

According to CoreLogic, the Australian government is expected to intervene in the event that home values do appreciate quite rapidly. This is so that house prices can be put on a leash in order to avoid a repeat of previous market issues.

Likewise, authorities could continue on its policy of implementing lower interest rates, which not only would energise the property market but also prop up the national economy over the long term.

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