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Australian Property Market Update – ANZ Bank – 2nd December 2013

The ANZ Bank has released it’s latest weekly property market update- home prices have moderated in November while the auction markets softened.

  • RP Data-Rismark home price data combined with softer auction clearance rates in recent weeks indicate some softening in the strength of home buyer demand relative to the elevated level of auction listings is easing the upward pressure on home prices.
  • National capital city home prices posted further increases in November, however today’s data revealed softer monthly house price gains despite strong housing sales and elevated auction clearance rates.
  • In seasonally adjusted terms, home prices rose by 0.4% in the month to be 8.0% higher year-on-year. House prices edged 0.2% higher m/m (+8.1% y/y) while apartment prices increase 1.5% m/m (+7.3% y/y).
  • Sharply improved home affordability and a rebound in buyer sentiment have released a substantial amount of ‘pent up’ home buyer demand that had built up over previous years. Moreover, an extended period of low interest rates and tightening market fundamentals should drive further price gains in the year ahead.
  • Despite easing from the highs of October, auction clearance rates remained elevated in the past week while the number of auction sales has risen sharply with the trend number of cleared auctions at record highs. Auction sales have increased particularly strongly in both Sydney and Melbourne in recent months.

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RP Data-Rismark home price data combined with softer auction clearance rates in recent weeks indicate some softening in the strength of home buyer demand relative to the elevated level of auction listings are easing the upward pressure on home prices, particularly in Melbourne.

National capital city home prices posted further increases in November, however today’s data revealed softer monthly house price gains despite strong housing sales and elevated auction clearance rates. In seasonally adjusted terms, home prices rose by 0.4% in the month to be 8.0% higher year-on-year. House prices edged 0.2% higher m/m (+8.1% y/y) while apartment prices increase 1.5% m/m (+7.3% y/y).

Perth home prices posted the strongest monthly growth (+3.1% m/m), followed by Sydney and Adelaide (both +1.1% m/m). In annual growth terms, Sydney continues to lead the charge with home prices a strong 12.5% higher than year earlier levels followed by Perth (+8.9% y/y) and Melbourne (+6.6% y/y). While property market conditions have improved in most capital cities, Sydney, Melbourne and Perth are clearly the front runners, buoyed by solid property market fundamentals and improved home buyer confidence.

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Despite easing from the highs of October, auction clearance rates remained elevated in the past week. Sydney’s auction market continued to post the highest clearance rate (75% in the week ending 1 December) while Melbourne’s clearance rate was 69%. Of the other capital cities, Adelaide cleared 65% of auctions (on 56 reported auctions), followed by Canberra (60%, 47 auctions), Brisbane (44%, 196 auctions) and Perth (43%, 56 auctions).

The number of auction sales has risen sharply with the trend number of cleared auctions at record highs. Auction sales have increased particularly strongly in both Sydney and Melbourne in recent months. In trend terms, Sydney is clearing 43% more auctions compared to the previous peak in 2010.

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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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