Westpac has released its monthly Housing Pulse, which reports a “discernible shift in Australia’s housing market”, with buyers “perking up”, price growth lifting, auction clearance rates rising, and supply tightening.
Westpac notes that “housing-related sentiment has turned”, with the ‘time to buy a dwelling’ index surging another 10% in August, buoyed by RBA rate cuts.
“Price expectations remain bullish and unemployment expectations point to little concern about jobs”, Westpac notes, expecting a “decisive” 10% to 15% rise in turnover by year-end.
Demand is lifting, as evident by the jump in auction clearance rates. At the same time, supply is tightening.
“Across the major capital city markets, there are currently around 68k listings, a 15yr low equal to 2½ months of sales—we are usually closer to 3½ months”, Westpac noted.
“Monthly new listings are lagging sales by about 7.5k. If demand rises 10-15% from here, sparks may fly”.
Australian house price growth is bound to accelerate on the back of further rate cuts and stimulatory policy from the federal government.
Financial markets are tipping at least two additional 25 bp rate cuts by mid-2025, whereas the Albanese government’s 5% deposit scheme for first home buyers comes into effect on 1 October 2025. Both will add to buyer demand, lifting prices further.
With Australian housing values already at record highs and completely detached from household incomes, further price growth is the last thing the nation needs.
