AUSTRALIAN house prices could stage a recovery this year with demand from owner occupiers expected to support - and even boost - real estate prices. "The market is bottoming out and there is a chance we could see prices rise this year," Mr Christopher said.
"We're seeing a situation where would-be home buyers have been holding off buying, and renting for an additional six months or more. Now, with the possibility that interest rates will remain on hold, they are jumping back into the market," Mr Christopher said.
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Weekend clearance rates in Sydney, Melbourne and Adelaide all rose strongly last weekend, reflecting renewed enthusiasm from owner-occupier buyers, said Mr Christopher.
Sydney's clearance rate of 62.8 per was the city's highest for two years and represented a significant increase from the previous week's 51.1 per cent. The city's auction clearance rates bottomed out in 2004 at 33 per cent - a 15-year low. House prices fell throughout 2004 and 2005 with the property downturn.
The clearance rate for Adelaide was stronger at 73.9 per cent while the rate for Melbourne was 56 per cent.
Another sign of recovery was that median house prices rose in Sydney for the December 2005 quarter, the first such rise for Sydney since the December Quarter 2004, Mr Christopher said. The median house price rose by 0.1 per cent to $518,000 from a revised $517,500 in the September Quarter, according to APM's adjusted house price series.
While house prices rose in capital cities during the December quarter, the unit market fell in east coast cities.
Mr Christopher says investors were not so keen as owner occupiers to invest in property. Many had lost money buying off-the-plan units or in areas with a large supply.
"Investors are still clearing out of the market. At this stage, many have been burnt by the property downturn. These people will stay away for a long time.
"Investors are still finding better returns in the stock market whereas rental returns, while they have improved, are still very low," he said.
"There is a chance we might get a sudden jolt in prices if there is a push of demand that would have a quick and positive impact on prices," said the head of research at Australian Property Monitors (APM), Louis Christopher.
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