RPData reported that home values across Australia’s capital cities were up 1.2% in January, taking the annual movement in dwelling values back into the black with a 1.8% increase over the past twelve months.
Dwelling values across Australia’s combined capital cities recorded a 1.2 per cent improvement over the month of January, negating the -1.2 per cent drop in values recorded over the final quarter of 2012. Since bottoming out in May 2012, dwelling values across the combined capital cities have recovered 3.1 per cent.
The year on year results have now moved firmly into positive territory, with capital city dwelling values 1.8 per cent higher over twelve months ending January 31st. Every capital city, apart from Melbourne (-0.4 per cent), has recorded an increase in dwelling values over the past twelve months.
The gains in January were mostly focused within the Brisbane property market, as well as Sydney and Perth where values were up 2.0 per cent, 1.8 per cent and 1.7 per cent respectively. Conditions across the Melbourne and Adelaide housing markets remained relatively subdued with dwelling values rising by 0.2 per cent and 0.4 per cent respectively.
According to RP Data’s research director, Tim Lawless, housing market conditions have started the year on a strong footing.
“These strong January results are likely to have seen some upwards seasonal bias, however the housing market has been on a clear recovery trend since June last year. Capital gains aren’t likely to remain this high over the coming months, however we are likely to see the recovery trend continue through 2013.”
“Despite the improving market conditions in January, dwelling values across the combined capital cities remain 4.6% below their 2010 peak.
“The latest housing market data adds weight to the argument that interest rates may be at the bottom of the cycle. The Reserve Bank will be watching the performance of the housing market closely, and the positive trend in housing values will dampen calls for further interest rate cuts,” Mr Lawless said.
Additional data is also pointing towards an improvement in the Australia housing market. The average number of days it takes to sell a property was steadily decreasing prior to the seasonal slowdown in December / January, and the rate of vendor discounting was also on a clear trend of improvement.
According to Mr Lawless, these metrics are a sign that vendors are gradually regaining some leverage in the market.
“The typical capital city house took fifty five days to sell in December last year, a vast improvement from the recent high of 76 days recorded in February last year. Additionally, vendors are now discounting their initial asking prices by an average of 6.6 per cent compared with -7.3 per cent a year ago.
“With stock levels remaining high, it is likely to remain a buyers’ market for some time, however I think we are now seeing some balance return to the negotiation table. Buyers are losing some of their negotiation power and homes are selling faster,” Mr Lawless said.