In particular, the marked improvement in credit availability was especially encouraging given ANZ Research’s view that restricted credit has been the key factor behind the downturn.
Confidence improved broadly across the country, with New South Wales, Victoria, Queensland, Western Australia and South Australia all posting gains, suggesting to ANZ Research the worst of the house price falls are probably behind us.
However, ANZ Research believes that credit availability will continue to be restrained, and the bounce in prices and construction will be more muted than the rebound in residential indicators suggests.
"Confidence improved broadly across the country… suggesting the worst of the house price falls are probably behind us.”
Sentiment also bounced in the commercial property space and is well above confidence in the residential sector. The outlook for the office, industrial, aged care and accommodation segments all improved.
Since April, ANZ Research has been flagging emerging signs of stability in the residential property market. In particular, they noted the pace of house price declines was slowing and auction clearance rates were beginning to rise.
Over the past month, lower interest rates, the proposed change to the interest rate floor by the regulator and the removal of uncertainty around the impact of possible tax policy changes have boosted sentiment toward housing.
This boost is reflected in the rise in the auction clearance rate in Sydney and Melbourne to the highest level in more than a year.
The latest ANZ-PCA survey captures this shift with broad material improvement. Of particular note is the marked improvement in credit availability. This measure has proved to be a reliable indicator of shifts in housing activity in the past and, if it remains so, suggests better times ahead.
It seems safe to say the worst of the house price declines are well and truly behind us.
This doesn’t mean ANZ Research is expecting a shift back to dramatic increases in house prices - which would not be seen as desirable, given the still stretched levels of affordability in Sydney and Melbourne.
Nor does ANZ Research think it is likely in the prevailing environment of more stringent credit policies.
Confidence across the property sector has bounced solidly following four straight quarters of declines. Although halting a period of significant weakness, our view is the recovery in housing is likely to be relatively subdued.