Home values continue to rise during October, albeit at a slower pace than those experienced during September.
The CoreLogic Home Value Index for October showed that capital city dwelling values rose just 0.5 per cent during the month, a drop from the previous growth results reported during August and September in which dwelling values rose 1.1 per cent and 1 per cent respectively.
Sydney’s prices increased by 0.6 per cent during October, resulting in an average median dwelling price of $800,000. However it was Melbourne and Brisbane which led the capital cities with the most growth in dwelling prices, both seeing a 0.8 per cent increase and resulting in a median of $600,000 for Melbourne and $470,000 for Brisbane.
Adelaide and Hobart were the only capital cities to see a fall in dwelling values. The
South Australian capital city fell by 2.4 per cent while the Tasmanian capital fell by 2.1 per cent. Hobart remains the cheapest capital city, with a median dwelling value of $343,500 while Adelaide’s median dwelling price sits at $415,000.
Rental vacancies rose again during September according to the latest figures reported by SQM Research.
Nationally the vacancy rate rose 2.4 per cent during September, up 2.3 per cent during August.
Perth continues to be troubled by properties which remain untenanted, recording the highest vacancy rate at 5 per cent. Meanwhile, Hobart’s rental market remained the nations tightest, with a vacancy rate of just 0.6 per cent.
Reflecting its high vacancy rates, the SQM Research report revealed that the city of Perth also recorded falls of 9.5 per cent and 11.1 per cent in asking rents for houses and units respectively over the past twelve months.
Yearly falls were also reported for Darwin, where asking rents for houses are down 4.8 per cent and for units down 3.5 per cent. Darwin is the second most expensive city to rent in Australia following Sydney. Weekly rents in the New South Wales capital for a house sit at $725 per week and $511 for units.
Of the capital cities, Hobart remains the most affordable for rental accommodation, with houses costing just $359 per week to rent and units averaging $287 per week.
CoreLogic also released a country-wide regional rental report towards the end of October which showed that outside the capital cities, rental property market conditions remain weak.
The CoreLogic report explained that Tasmania has recorded the strongest rental growth across the country over the past year, with a 2 per cent increase in rent for houses and 4.5 per cent for units. Meanwhile, asking rents in regional Northern Territory and regional Western Australia were down 6 per cent and 5.6 per cent respectively over the year.
A snapshot of the regions with the highest rental growth included West Moreton in Queensland which saw house rents increase 5 per cent over the last quarter to $318 per week and Wimmera in Victoria which saw house rents increase 3.3 per cent over the quarter to $318 per week and unit rents increase 2.5 per cent per week over the quarter to $205 per week.
South West Queensland unit rents also increased 11.8 per cent over the last quarter to $308 per week.
The Australian Bureau of Statistics released the latest building approvals data for September 2016 last week.
Total dwelling units approved continue to slow, with an 8.7 per cent drop when compared to last year in seasonally adjusted terms.
While there has been a 2.3 per cent rise in the number of approvals for new houses to 9,605, apartment and townhouse approvals fell 16.3 per cent to 9,166.
Although the value of residential building fell 0.1 per cent and has fallen for two months, the trend estimate of the value of total building approved rose 2.1 per cent in September and has risen for ten months.
Finance and interest rates
When the Reserve Bank of Australia (RBA) delivered their decision at the 1st of November 2016 board meeting, they decided to keep rates on hold at 1.5 per cent for the third straight month. It was also the fifth year in a row that there has not been an interest rate change on Melbourne Cup Day.
While interest rates remain at all-time lows, mortgage rates from major banks and other lenders could still increase due to rules which are part of the Basel III accord.
International banking regulators have told Australian banks to start relying more on Australian customer deposits to fund loans, rather than overseas money markets.
This means banks are left with two options; to cover the added cost they can increase interest rates or reduce the discount customers might be expecting to receive on their variable rate next year.
Auction clearance rates
The preliminary auction clearance rate rose to 77.5 per cent according to results reported by CoreLogic on Sunday the 6th of November.
There were 2,490 auctions scheduled for the week, up from the 2,253 reported for the previous week. However, the number of auctions is down on the same time last year, when 2,947 auctions were reported with a 61.4 per cent clearance rate.
Sydney continues to record a clearance rate above 80 per cent. Of the 1,063 auctions schedule, 82.1 per cent sold.
Perth, with only fifty one auctions schedule achieved only a 31.8 per cent clearance rate.