Latest NewsHouse Sales on the Boil As Confidence ReturnsFriday, 25 November 2016

Just 3 per cent of people expect home prices to fall this year - compared to a third who were expecting prices to fall when surveyed early last year, according to the latest Westpac Consumer Sentiment survey.

Despite three official interest rate rises, and the likelihood of more, sentiment towards property ranks at the highest levels since 1994.

The biggest rise in optimism was in NSW, much of it stemming from improved auction results late last year, which an Australian Property Monitors economist, Matthew Bell, described as the strongest for 20 years.

About 84 per cent of NSW respondents expect prices to increase this year. Almost a quarter expect 10 per cent price gains, according to the survey.

Sydney estate agents sold a record $10.2 billion of homes at auction last year. The tally was a narrow improvement on the $10.1 billion sales figure for 2007, and easily smashed the lethargic 2008 sales total of just $6.99 billion.

There were 18,800 houses and units auctioned last year, according to Australian Property Monitors. Sales under the hammer totalled a successful 69 per cent.

The 14,200 properties fetched an average of $718,000, a slight increase on the $703,000 average price at auction in 2008.

The volume last year almost returned to 2007 levels, when 19,100 properties were listed for auction, the highest number since 2002. In 2007 the average auction sale price was $780,000.

November was the priciest month last year, with a $781,000 median price, as vendors of more expensive properties began to return to the market. Last year's auctions began in February with a median price of just $553,000, reflecting the domination of the market by first-home buyer listings.

"The expected drop off in first-home buyer activity in 2010 should mean that the median auction price remains above the levels seen at the end of 2009," Mr Bell, of Australian Property Monitors, said.

"I expect continued strong auction listings and sales as the top end continues to outperform the affordable end of the market in the first quarter of 2010.

"The last quarter of 2009 was the strongest in 20 years in terms of 4800 properties sold at auction in Sydney driven by the more expensive end of the market."

The median dwelling price across Australia was $380,000 in the September quarter, up from $360,000 in the same quarter in 2008, according to a study by RP Data-Rismark.

The managing director of Rismark International, Christopher Joye, said that since the typical Australian household has an annual income of $92,900, he believed there had been no discernible increase in house prices relative to disposable income since the end of the last boom in 2003.

"It is one important explanation for the exceptionally resilient performance of Australia's housing market during the global financial crisis," Mr Joye said.

"In December 2003 Australian dwelling prices were 4.2 times disposable incomes, which is effectively where they remain today."

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