Here’s this week’s property market wrap with a summary of the news that happened…
The Australian Prudential Regulation Authority (APRA) released their quarterly analysis of authorised deposit-taking institutions (ADIs) exposure to property for the September quarter earlier this week and you can read a lot more about it in our blog.
The data showed that the total value of outstanding residential mortgages was 7.6% higher for owner occupiers over the year and 11.9% higher for investors with 64% of the value outstanding to owner occupiers and the remaining 34% to investors.
Based on the value of loans, a record high 36.8% of loans had an offset facility at the end of September and a record high 36.2% were interest-only mortgages.
Over the year, loans with an offset facility have increased by 17.5% and interest-only mortgages are up by 14.4%. The data showed that the average amount owing for all home loans was $238,700 while loans with an offset ($284,600) and interest-only loans ($308,400) had a higher average amount owing.
Looking at the same data but looking at new lending over the September 2014 quarter showed that year-on-year, the value of owner occupier mortgages is up 6.9% compared to a 21.4% rise in investment mortgages. 42.5% of all new loans were interest only and the value of interest-only lending was up 26.1% year-on-year.
Although only 3.5% of all loans were approved outside of serviceability, the value of these loans was up 30.8% year-on-year.
Finally, just 12.1% of new mortgages had a loan-to-valuation ratio (LVR) of more than 90% which was the lowest proportion since June 2011 and the value of these loans was -3.8% lower over the year.
The Australian Bureau of Statistics (ABS) released data on construction work done over the September 2014 quarter earlier this week.
The data showed that construction work fell by -2.2% over the quarter to be -5.1% lower year-on-year.
The -2.2% quarterly fall was made up of a -3.2% fall in engineering construction, a -1.6% fall in residential building and a -0.1% fall in non-residential building.
Highlighting the sharp fall in mining investment, since engineering construction work peaked in September 2012 it has now fallen by -15%.
With mining construction fading and a recent fall in residential building the prospect of residential construction filling the economic gap left by the development of large resources related infrastructure projects is looking less certain.
The House Economics committee released their recommendations around the framework for foreign investment into residential real estate this week.
The recommendations come after an investigation into the effectiveness of the FIRB (Foreign Investment Review Board).
While the recommendations suggest the rules around foreign investment are sound, the committee has put forward 12 recommendations aimed at strengthening the monitoring and enforcement of foreign investment rules.
The recommendations include an additional administration fee to be paid by foreign buyers, new penalties for breaches of the FIRB rules that will apply to both foreign buyers and intermediaries such as real estate agents, family members and conveyancers, the introduction of a national land title register to record the citizenship and residency status of real estate buyers and greater data sharing between Government departments.
Weekly Clearance Rates
RP Data recorded 2,841 auctions results across last week which accounted for 86% of all auctions held.
The weighted average auction clearance rate remained below the 70% mark for the eighth week running, recorded at 65.7%.
At the same time last year the weighted average clearance rate was slightly lower at 65.4%.
Last week RP Data was monitoring 3,315 auctions across the capital cities, which was 22%, higher than a year ago but -1% lower than the previous week.
The largest auction markets continued to record the highest clearance rates.
Sydney’s auction market saw a success rate of 71.8% across 1,337 auctions, which was lower than the 73.1% clearance rate the previous week and Melbourne recorded a clearance rate of 66.1% across 1,433 auctions, lower than the 68.9% auction clearance rate the previous week.
Capital city auction clearance rates –Week ending November 23, 2014
Weekly Advertised Listings
Over the four weeks to the 23rd of November, there were 53,478 newly advertised properties added the national market which was slightly lower than over the previous week.
New listing numbers are higher than at the same time a year ago (+2.0%) nationally, but across the capital cities vendors seem to be more confident, with the number of newly advertised properties up 4.2% compared with last year.
The largest rise in newly advertised stock numbers continues to be seen in Brisbane, where new listings are 12.3% higher than a year ago, and in Adelaide where new listing numbers are 4.5% higher. There has been a reduction in new listing numbers compared with a year ago in Hobart (-8.8%), Darwin (-5.9%) and Canberra (-11.0%).
Total advertised stock levels have been trending higher recently and are at their highest level since the middle of December last year.
Nationally there are 256,524 homes being advertised for sale (-0.1% lower than a year ago) and across the capital cities there are 113,115 listings (-0.8% compared with last year).
Note that sales listings are based on a rolling 28 day count of unique properties that have been advertised for sale.
Number of homes for sale
Residential property listings advertised for sale over the four weeks ending 23/11/2014