Tag Archives: australian
Rents down in all Australian cities apart from Melbourne and Hobart
Residential rents in Australia fell in all cities except for Melbourne and Hobart in July taking the combined capital city median weekly rent to $483 a week, the lowest since December 2015. Combined capital city rental rates are $485 a week for houses and $467 a week for units, according to the latest rent index from real estate firm CoreLogic. Overall the index fell by 0.3% over the month and is 0.6% lower than it was in July 2015 and it is anticipated that the rental market weakness will persist and that on an annual basis rents will continue to fall over the coming months. A breakdown of the figures shows that over the past 12 months rental rates have increased in Sydney by 0.4%, in Melbourne by 2%, in Hobart by 6.2% and in Canberra by 1.9%. Rents fell by 1% in Brisbane, by 0.5% in Adelaide, by 9.2% in Perth and by 15.7% in Darwin. CoreLogic research analyst Cameron Kusher pointed out that Hobart and Canberra are the only capital cities to have recorded stronger rental growth over the past year compared to the previous year. He explained that the market is currently seeing the softest wages growth on record and the declines are being cause by relatively high levels of housing investment following record highs recently and well as historically high levels of new dwelling construction as most of them are units which are more than twice as likely to be rented. He also pointed out that slowing population growth creates less overall demand for housing at a time when home commencements and the number of dwellings under construction were at historic high levels in March 2016. ‘The combination of all these factors means that landlords have little scope to increase rental rates in this current market. Potentially, the changing rental market conditions will have a flow on effect for older stock, particularly units given we’re seeing so much new unit supply being added to the rental market, much of which is located in inner city locations,’ he explained. He also said that while rental rates are falling and values continue to rise, gross rental yields remain at record low levels. ‘As a result of record low rental yields and the weakest rental market on record, those investors currently active are clearly focusing on capital growth potential,’ he added. Continue reading
New home lending rises in Australia as interest rates are cut
New home lending in Australia saw a healthy rise during June, up 2.3% and up 6.3% compared to the same month in 2015, the latest data from the Australian Bureau of Statistics shows. The Reserve Bank of Australia cut its interest rate at the beginning of May so June’s housing finance results are the first month’s data to fully capture the effect of cheaper mortgage costs. According to Shane Garrett, Housing Industry Association (HIA) senior economist, prospective home buyers seem to have taken advantage of the lower interest rate environment. ‘June was also dominated by the close federal election campaign which was the source of some uncertainty across the economy. This data indicates that the benefits of lower interest rates trumped any reluctance by buyers to enter the market during the tight election race. It’s therefore likely that the interest rate cut will help bolster activity on the new home building side,’ he explained. A breakdown of the figures shows that the strongest growth in new home lending over the year to June 2016 was in Victoria with an uptick of 19.1%, followed by New South Wales with growth of 10.8% while there was a more measured increase in Queensland of 4.3%. Over the same period, there were substantial reductions in other states, most notably a fall of 20.7% in Western Australian, a fall of 17.7% in the Northern Territory and a more modest fall of 3.5% in Tasmania. New home lending to owner occupiers in South Australia and the ACT during June 2016 was comparable with the level a year ago. Meanwhile, the HIA’s New Home Sales Report, a survey of Australia’s largest volume builders, shows that total new home sales ended 2015/2016 on a higher note. The overall trend is still one of modest decline for new home sales but a bounce of 8.2% in June 2016 highlights the resilience of the national new home building sector, according to HIA chief economist, Harley Dale. ‘The overall profile of HIA new home sales is signalling an orderly correction to national new home construction in the short term, as are other leading housing indicators. Below the national surface, the large geographical divergences between state housing markets have been a prominent feature of the current cycle and that will continue,’ he explained. Comparing the second quarter of 2016 with the same period last year shows that detached house sales were down sharply in South Australia by 21.4%, in Western Australia by 27.5% and in down by 7.3% in New South Wales but up by 17% in Victoria and by 7.1% in Queensland. Overall the sale of detached houses bounced back by 7.2% month on month in June 2016 while multi-unit’ sales continued their recent recovery, up by 11.5% after a lift of 4.9% in May. In the month of June 2016 detached house sales increased in all five mainland states with the largest increase in Queensland at 14.9% and up by 9.1% in Western… Continue reading
New home approvals in Australia down in June, latest data shows
The number of new home approvals in Australia fell by 0.9% in June, the second monthly fall in a row, according to the latest data to be published. In seasonally adjusted terms, total approvals decreased 2.9% with both total other residential dwelling approvals and total houses down by 3.4% and 2.4% respectively. The figures from the Australian Bureau of Statistics (ABS) also show that the value of total building approved rose 1.2% in June, in trend terms, and has risen for six months. The value of residential building rose 0.1% while non-residential building rose 3.7%. A breakdown of the figures show that home approvals decreased by 5.2% in Western Australia, by 3.7% in Tasmania, by 3.2% in Queensland, by 2.8% in the Australian Capital Territory and by 0.1% in Victoria. They increased by 3.6% in the Northern Territory, by 1.6% in South Australia and by 0.8% in New South Wales. Private sector house approvals fell by 3.5% in Western Australia, by 0.6% in Victoria, by 0.5% in Queensland and by 0.3% in South Australia but increased by 0.9% in New South Wales. Overall approvals are continuing to ease back from the record highs hit last year, according to Shane Garrett, senior economist for the Housing Industry Association (HIA). He explained that approvals for both the detached house and multi-unit side peaked in the middle of 2015. ‘Since then, detached house approvals have glided lower in an orderly manner. Multi-unit approvals have continued to be resilient, although sit at levels slightly lower than a year ago,’ Garrett pointed out. ‘The immediate pipeline of new home building work is set to remain very solid, based on this latest approvals update. Recent approvals releases have also highlighted the considerable variation in new home building activity across the different states and territories. We expect the trajectory of new dwelling approvals to continue retreating at a modest pace over coming months,’ he added. Continue reading
