Housing & Economic Update – July 2014

Here’s a summary of the latest stats from RP Data on the property markets around Australia.

Capital city home values increased by 1.4% in June and they increased by 10.1% over the 2013/14 financial year

  • Home values increased by 1.4% across the combined capital cities in June, partially offsetting the -1.9% fall in May.
  • Over the month, home values rose across each capital city except for Adelaide and Darwin.
  • Over the second quarter of 2014, capital city home values fell by -0.2% and were lower in each city except for Sydney (1.0%), Brisbane (0.7%) and Perth (0.6%).
  • Capital city home values rose in each capital city over the past year, the greatest increases were recorded in Sydney (15.4%), Melbourne (9.4%) and Brisbane (7.0%) with all other capital cities recording value growth of less than 6.0%.
  • Combined capital city home values have now moved 7.0% past their historic highs across the combined capitals with values in Sydney, Melbourne, Perth and Canberra now above their previous peaks.
  • Looking at value movements across broad price segments in the market over the year, the middle 50% of capital city suburbs have recorded a value increase of 10.7% followed by a 10.4% increase across the most expensive 25% of suburbs and an 8.8% increase across the most affordable suburbs.

Sales activity across the country is higher than at the same time last year but has not returned to the heights reached in late 2013

  • Over the three months to April 2014 there was 85,759 house sales across the country which was 4.0% higher than over the same period in 2013.
  • There were an estimated 32,064 unit sales over the three months to April 2014 which is -1.9% lower than over the same period in 2013.
  • Sales volumes most recently peaked over the three months to November 2013 with 94,783 house sales and 36,565 unit sales.

Rental rates have risen at a slow rate over the past year, but not at a fast enough pace to result in any increase in yields

  •  Capital city house rents have increased by 2.0% over the year to June 2014 compared to a 3.3% increase in unit rents, both of which are well below value growth figures over the year.
  • Gross rental yields for houses have fallen from 4.2% a year ago to 3.9% currently while unit yields have decreased to 4.6% from 4.9% a year ago.

Vendor discount levels and the average number of days on market have improved from the same time last year but are higher than recent lows

  • Based on private treaty sales which sold for less than their initial list price, vendors were discounting their initial selling prices for homes by -5.8% in May 2014 compared to -6.0% a year earlier.
  • The average number of days it took to sell a home is currently recorded at 42 days compared to 49 days a year ago.
  • An analysis by RP Data shows that across the combined capital cities over the three months to May 2014, 44.9% of homes sold for more than their original list price.

Economic data flows remains mixed buy is generally more positive than negative

  • Headline inflation increased by 0.6% over the March 2014 quarter and is recorded at an annual rate of 2.9% and core inflation is at 2.6%.
  • The Australian economy grew by 3.5% over the 12 months to March 2014.
  • No change was made to official interest rates by the RBA at their July board meeting with no change to interest rates in 11 months.
  • The unemployment rate was steady at 5.8% in May 2014 but up from 5.5% at the same time in 2013.
  • Consumer confidence has been trending lower since September 2013 and in June 2014 it was recorded at 93.2 points, up slightly over the month but -8.8% lower year-on-year.
  • The total number of first home buyer finance commitments in April 2014 had fallen by -12.7% year-on-year with first home buyers accounting for 12.3% of all owner occupier finance commitments.
  • Overall owner occupier housing finance (ex-refi’s) have increased by 5.7% year-on-year while refinance commitments are up 8.6% year-on-year.
  • The value of finance commitments for investment purposes is 9.8% higher year-on-year to April 2014 and investors account for 39.4% of all finance commitments, sitting at a level close to their highest proportion since October 2003.
  • Private sector housing credit has grown by 6.2% over the 12 months to May 2014, its highest annual rate of growth since April 2011.
  • Dwelling approvals were 1.1% higher year-on-year in April 2014. The annual number of dwelling approvals is 16.5% higher over the year and at its highest level since the 12 months to January 1995.
  • Population growth over the 12 months to December 2013 increased by 1.7% or 396,154 persons.

 



Want more of this type of information?


Cameron Kusher

About

Cameron Kusher is Corelogic RP Data’s senior research analyst. Cameron has a thorough understanding of the fundamentals such as demographics, trends & economics. Visit www.corelogic.com.au


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