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Property market update July 2019

BMT team — Thu, 04 Jul 2019 04:09:45 +0000

Property values Sydney and Melbourne housing market conditions continued to improve in June, despite dwelling values still trending lower nationally, according to CoreLogic’s June 2019 Home Property Value Index. Interest rate cuts and renewed confidence in the property market are having a flow-on effect for conditions across the country. CoreLogic recorded a 0.2 per cent fall in national dwelling values, the smallest month-on-month decline since March 2018. Sydney saw an uptrend in dwelling values of 0.1 per cent, marking the first monthly increase in the city since July 2017. In addition, Melbourne recorded a rise of 0.2 per cent, the first move since November 2017. Hobart was the only other capital city to record an increase (0.2 per cent) in dwelling values. Despite strong growth over the past few years, Hobart experienced a 1.1 per cent fall over the three months leading up to June. Outside of Hobart, regional Tasmania proved strong, increasing by 1.3 per cent for the quarter. This is contrary to the general trend among other regional areas where dwelling values are losing momentum. Darwin experienced the biggest decline in housing values, falling by 0.9 per cent over June and 3.6 per cent over the quarter. Perth also continued its weaker trend, with a monthly decline of 0.7 per cent in June and 2.1 per cent over the quarter. Adelaide fell by 0.5 in June and 0.4 per cent over the quarter, marking the smallest decline amongst the capital cities. Brisbane slipped by 0.6 per cent and Canberra by 0.9 per cent. Residential listings National residential property listings fell by 5.8 per cent in June while year-on-year listings declined by 1.8 per cent, according SQM Research. Listing numbers in Sydney experienced the highest decline, falling by 10.8 per cent over the month and 9.8 per cent from the same time last year. Melbourne wasn’t far behind, recording a 10.7 per cent decline over June. Other declines included Hobart (9.4 per cent), Canberra (9 per cent), Adelaide (5.2 per cent), Perth (5.1 per cent) and Brisbane (4.4 per cent). Darwin recorded the lowest fall in listings at 1.3 per cent. Seasonally, it’s not unusual for listing numbers to fall throughout winter. With colder weather and falling housing prices, many vendors are waiting longer to sell. The Reserve Bank of Australia’s additional rate cuts could see an upward trend in listings throughout July. Vacancy and rental rates National rental rates remained relatively unchanged in June, tracking 0.3 per cent higher for the quarter and 0.4 per cent higher for the financial year. Despite sluggish conditions capital cities are starting to see rental rates rise faster, while those experiencing weakening are seeing the pace of decline ease. Hobart continued to lead the charge for rental rate growth after recording a 4.7 per cent monthly increase. With Hobart’s rental rates outperforming dwelling values, gross rental yields are continuing to push higher. Darwin was on the other end of the property spectrum, tracking the largest yearly fall of 4.7 per cent. Gross rental yields across both combined capital cities and combined regional areas rose from record lows, signalling that the property downturn may be over. Auction clearance rates National auction clearance rates got off to a slow start in June with the Queen’s birthday long weekend returning an average preliminary auction clearance rate of 51.3 per cent. However, the housing market surged back to life mid-month with CoreLogic recording a preliminary national clearance rate of 66.4 per cent from almost 1,500 auctions. The winter auction market continued to warm as more than 60 per cent of listed properties were sold under the hammer nationally for three consecutive weeks. According to CoreLogic, both the Sydney and Melbourne markets consistently recorded preliminary rates of above 60 per cent. This is a substantial improvement relative to late 2018 where rates were holding in the low 40 per cent range. While Sydney and Melbourne auction clearance rates have kept up their post-election energy, low auction volumes are likely to weaken the market pulse if house prices remain flat. Finance and interest rates The Reserve Bank of Australia (RBA) has cut interest rates for the second time in two months, reducing the official cash rate to a record low of just 1 per cent. The unprecedented move to further reduce rates follows on from the RBA’s decision to drop rates to1.25 per cent at the beginning of June. In an attempt to kick-start the economy and drive unemployment lower, the 25-basis points reduction marks the first time the RBA has delivered back-to-back cuts since 2012. In the statement accompanying the decision, RBA governor Philip Lowe indicated rates could be pushed even lower if the jobless rate didn’t fall fast enough. This mirrors several predictions that the official rate will fall as low as 0.75 per cent by the end of 2019. Treasurer Josh Frydenberg said the government expects the banks to pass on the full rate cut to borrowers. Along with interest rate cuts, CoreLogic said housing finance data and credit aggregates have caused a slowdown in investment lending. Investor credit has increased at an historically slow rate of 0.6 per cent.

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Property market update – March 2017

BMT team — Tue, 14 Mar 2017 04:11:55 +0000

Property values Just when you thought property prices couldn’t increase any further, data from the latest CoreLogic Home Value index for February 2017 indicates that capital city home prices rose a further 1.4 per cent. Over the past twelve months, prices across the capital cities are now 11.7 per cent higher. The Sydney property market remains particularly heated, seeing a further 2.6 per cent growth during the month and reaching an annual growth rate of 18.4 per cent. This means that if you purchased a property in Sydney before June 2012, it is now worth 75 per cent more than what it was purchased for. The median dwelling price for properties in Sydney is currently $795,000, followed closely by Melbourne with a median dwelling price of $610,000. Melbourne, Adelaide, Hobart and Canberra also experienced monthly increases in dwelling values during February. Meanwhile, only Brisbane, Perth and Darwin saw dwelling values fall. Darwin was the capital city which saw the largest decrease in average dwelling values, falling by 4.3 per cent. Residential listings It appears that a lack of supply coupled with strong demand continue to be the main factors pushing property prices higher. The latest data from SQM Research shows that there has been a fall in stock available on the market over the past year of 5.1 per cent nationally. Of the capital cities, Hobart has seen the largest percentage fall. The number of residential listings available in the Tasmanian capital fell 13.4 per cent over the past year. While Melbourne saw more properties hit the market than any other capital city around the country during January, with 5,423 properties listed during the month, SQM Research figures for the Victorian capital suggest the number of listings trended downwards over the past year. Listings have fallen 9.7 per cent in Melbourne from 36,406 during February 2016 to 32,892 in February 2017. While a fall in residential stock in Sydney is less pronounced, at just 0.7 per cent, it has been argued that the city needs more listings to lessen the pressure that is contributing to the recent price growth. Rental vacancies While there has been a fall in properties available for purchase, the most recent figures compiled by CoreLogic show houses advertised for rent rose 8.7 per cent to 362,708 properties. In 2016, units available for rent were up 9.3 per cent to 287,233 properties. However, the CoreLogic figures suggest that the areas which are seeing the biggest increase in rental vacancies are located in Western Australia, especially in Perth. This is due to a decrease in demand following the end of the mining boom. There are some areas of Sydney such as Fairfield, Hornsby, the Hills Shire and Kur-ring-gai which reflect that investors have been actively purchasing in these areas and these properties are now becoming available for rent. Despite the annual increase, the latest figures from SQM Research indicate that there has been a fall in the national vacancy rate from 2.8 per cent in December 2016 to just 2.4 per cent during January 2017. According to the SQM Research data, both Sydney and Melbourne saw falls in vacancies during January. Sydney went from 2.4 per cent in December to 2.0 per cent in January, whilst Melbourne went from 2.5 per cent in December to 2.0 per cent. Of the capital cities, Perth had the highest vacancy rate during January at 4.8 per cent. Auction clearance rates According to the latest data from CoreLogic on the capital city auction clearance rates, strong demand saw 80.8 per cent of properties sell across the capitals for the week ending the 12th of March. This was up on the 74.6 per cent clearance rate from the previous week and 64.9 per cent achieved during the same week one year earlier. Of the capital cities, Adelaide experienced the highest clearance rate at 87 per cent from just eighty two auctions reported. This was followed by Melbourne with an 84.3 per cent clearance rate from 355 total auctions and Sydney with an 83.1 per cent clearance rate from 766 total auctions. Canberra also performed strongly, registering a preliminary clearance rate of 83.3 per cent. One of the reasons driving high clearance rates is due to four of the eight states having a public holiday, which has meant a fall in auction volumes over the week. Rental rates The asking rents for both Perth and Darwin continue to fall reflecting the high vacancy rates being reported in these areas. The Northern Territory capital saw a fall in asking rents for units of 2.5 per cent during January and 0.1 per cent for houses. Meanwhile Perth has had the largest yearly decline of 7.6 per cent for houses to $435.50 per week and 10.8 per cent for units to $337.20 per week. However there was a slight improvement in weekly house rents, increasing 2 per cent in the week ending the 20th of February when compared with the previous week and up 0.5 per cent when compared to the previous month. Adelaide and Hobart remain the cheapest cities in which to rent. Houses in Adelaide currently rent at an average of $370.50 per week and units at $289.70 per week whilst houses in Hobart rent at $352.20 per week and units at $306.10 per week. Building approvals Given the lack of supply and demand for property being experienced in some areas of the Australian market, many are hoping to see a rise in the number of dwellings being approved. Despite this, the latest figures from the Australian Bureau of Statistics show that while the number of new buildings approved across the country increased slightly in January, it was lower than at the same time a year ago. The number of new dwellings approved in seasonally adjusted terms rose 1.8 per cent from 17,327 reported in December 2016 to 17,412 in January 2017. Over the past twelve months there has been a 12 per cent decline in the total number of dwellings approved in seasonally adjusted […]

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Property market update – February 2017

BMT team — Wed, 08 Feb 2017 23:05:06 +0000

Property values 2017 kicked off with continued growth in house prices according to CoreLogic’s Home Value Index. Combined capital city dwelling values increased by 0.7 per cent in January and as a result, values are 10.7 per cent higher than this time last year. Over the three months to January, it was Hobart which surprising led the capital cities in terms of the greatest increase in values. Tasmania’s capital saw dwelling values increase by 5.8 per cent, reaching a median dwelling price of $366,000. Sydney and Melbourne continue to be consistent performers in terms of dwelling price growth. Over the three months to January values rose by 2.7 and 2.4 per cent respectively in these cities. The current median dwelling price for Sydney is $850,000 while in Melbourne it sits at $640,000. Darwin was the only capital city where dwelling values experienced a fall, declining by 1.7 per cent during the month of January to a median dwelling price of $490,000. Residential property listings The latest data from SQM Research indicates that the number of residential property listings available fell during the month of January. According to the report, the biggest drop was experienced in Sydney and Melbourne, where listings declined 6.6 and 12.3 per cent during the month respectively. Nationally, there was a 3.0 per cent decrease in the number of residential properties listed. The only capital city which experienced an increase in listings over January was Darwin, with a 1.5 per cent increase. Auction clearance rates Despite the slowdown in residential property listings reported by SQM Research, the latest CoreLogic auction clearance rates indicate that the market will gather momentum after the seasonal holiday slowdown. Already there has been an increase in the number of auctions across the capital cities over the past week, with 867 auctions reported for the week ending the 5th of January compared with just 368 auctions during the previous week. From the 867 auctions tracked, CoreLogic reported a preliminary clearance rate of 70.8 per cent, down slight from the 71.6 per cent recorded for the last week of January. Rental rates Figures from the latest SQM Research Weekly Rental Index for the week ending the 4th of February show that over the month of January weekly rents for houses decreased by 1.4 per cent whilst weekly rents for units increased by 0.3 per cent. Of the capital cities, Canberra and Hobart led the way with the most significant increases in weekly rents for houses and units. Canberra experienced a 2.2 per cent increase in house rents and a 0.4 per cent increase in unit rents while Hobart saw a 2.3 per cent increase in house rents and a 0.7 per cent increase in unit rents over the month. Asking rents for Sydney houses increased by 0.2 per cent over January. However, the New South Wales capital city also saw a decline in asking rents for units of 0.2 per cent. No other capital cities experienced a decrease in weekly rents during the month. However, the asking rents for Darwin, Brisbane and Adelaide units experienced no changes when compared with the previous month. Rental vacancies The most noteworthy news regarding vacancy rates reported recently were figures reported by the Property Council of Australia. According to the Property Council’s Office Market Report, there was a slight lift in office vacancy rates from 10.5 to 10.4 per cent. The Australian Central Business District (CBD) office vacancy rate has remained steady over the six months to January 2017, falling from 11.0 per cent to 10.9 per cent. Demand for office space has been strong in all capital cities and particularly in Brisbane, where the Property Council reported that office space in the city CBD is now more than five times higher than historical levels. The Sunshine Coast and the Gold Coast office markets have also recorded sharp declines in vacancies, with the two cities now sitting at 6.9 and 12.2 per cent office vacancy respectively. Sydney and Melbourne CBD’s continue to demonstrate a strong office market performance, with vacancy rates of 6.2 and 6.4 per cent respectively. Building approvals The Australian Bureau of Statistics (ABS) released the latest buildings approvals data for December 2016 in February. According to the report there were 17,327 dwellings approved in December, a fall in approvals of 1.2 per cent when compared with the previous month in seasonally adjusted terms. The drop follows a 7.5 per cent jump in approvals reported in November and the numbers of dwellings approved is 11.4 per cent lower than the same time one year ago. Finance and interest rates At the first board meeting of the year by the Reserve Bank of Australia (RBA) it was decided to leave rates on hold at 1.5 per cent. The decision was widely anticipated after all seventy two Economists surveyed by Reuters indicated they expected the cash rate to stay put. Despite record low interest rates, property investors may continue to face difficulties with new loan applications and requests to refinance. Just yesterday Commonwealth Bank subsidiary, Bankwest, announced it has again tightened their lending policies for property investors.

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