Tag Archives: australian
Auckland sees unprecedented housing market activity
Unprecedented sales activity in March saw Auckland’s residential housing market establish new records for prices and sales numbers, according to the latest index for the New Zealand city. March is always the most active month for property sales, but there has never been a month’s trading to compare with the past month, according to Peter Thompson, managing director of Barfoot & Thompson. The average sales price increased by 3.9% compared with February, pushing the average sales price to an all-time high of $776,729. It is more than $17,000 higher than the previous record average price set in December last year. The median price at $711,000 increased by 1.1% over that for February and is 9% higher than the median in March 2014, the data also shows. ‘March has set a string of new records,’ said Thompson, adding that a quarter of all the homes sold in the month were for in excess of $1 million and the firm sold 1,597 homes in the month, the highest number ever in a calendar month. ‘Buyers were not put off by the record prices, and for the last two weeks of the month we sold more than 400 homes each week, the highest two weeks trading in the company’s history,’ he explained. ‘Buyers remain convinced that with a stable economy, low interest rates and restricted housing availability, that buying at current prices is manageable,’ he added. The data reveals that in the first quarter of this year, the average sales price has risen 6.1% over 2014’s average price for the year of $716,588, and March’s average price was 7% higher than it was 12 months’ previously. During the firm sold 420 homes for in excess of $1 million, 167 more than the 253 homes we sold in March last year, which until now was the highest number of $1 million homes sold in a month. At the same time it sold 300 homes for under $500,000, which represented 18.8% of sales. According to Thompson current high prices are encouraging more home owners to bring their property to market, and during March the firm listed 1,997 new properties, the highest number in the past 17 months. ‘At month’s end we had 3347 properties on our books for sale, the highest for 10 months. While sales activity in April is unlikely to match that for March, given the relatively good level of choice available trading can be expected to remain extremely active,’ he concluded. Continue reading
New home sales in Australia reach new peak
Total seasonally adjusted new home sales increased by 1.1% in Australia in February following a gain of 1.8% in January, according to the latest data. It means that sales volumes are now just above the previous peak of April 2014 and a breakdown of the figures show that apartments are selling more than detached homes with flat sales up 11.1% and houses down 1.3%. But there are considerable regional variations. Detached house sales are easing in New South Wales and Western Australia, previously key drivers of growth, and have fallen significantly in South Australia. According to Harley Dale, chief economist of the Housing Industry Association (HIA), the modest growth in new house sales in Queensland and Victoria is not enough to offset these declines. The data shows that in February detached house sales increased by 1.5% in Victoria and by 0.2% in Queensland. Detached house sales fell 4.8% in New South Wales, 2% in South Australia and 2.9% in Western Australia. The level of sales in the three months to February 2015 compared with the previous three months was down 6.9% in New South Wales, down 2.8% in South Australia, and down 1.3% in Western Australia. Sales increased by 3.8% in Victoria and by 9% in Queensland. ‘This is another very strong result for Australia’s national new home building sector. In January, new dwelling approvals reached their highest level on record and now in February that activity remains at exceptionally high levels, with a solid pipeline of activity set to remain in play over the coming months,’ said HIA senior economist, Shane Garrett. Data also shows that new home approvals in February were 3.2% lower than the previous month but still recorded their second highest level since figures began 32 years ago. Detached house approvals inched up by 0.2% while there was a 6.6% fall in multi-unit approvals and according to Garrett at a time of weak overall domestic demand, new residential construction is acting as a welcome pillar of support. ‘A steady pipeline of new homes represents the most effective solution to alleviating housing affordability pressures. Governments at all levels must work to ensure supply constraints do not impede the continuation of elevated levels of new home construction,’ he explained. A breakdown of the figures shows that new home approvals increased most strongly in Victoria with a rise of 20.5%, followed by New South Wales up 13.5%, and Tasmania up 4%. But they fell by 8% in Western Australia, were down by 30.6% in Queensland and by 41.4% in South Australia. Garrett said that action to turn around new home building conditions in South Australia are urgently required. New home approvals declined in trend terms in both the Northern Territory with a fall of 2.7% and the Australian Capital Territory with a decline of 16.2%. Continue reading
Property prices in Australia up 0.3% in February
Property prices in Australian capital cities increased by 0.3% in February, taking the annual rise in values to 8.3%, the latest index data shows. Sydney again recorded the largest increase at 13.7% year on year followed by Melbourne at 7.4% and Brisbane at 5.9%, according to the CoreLogic RP Index. In contrast, dwelling values have increased by less than 4% in every other capital city over the year. The data also shows that since the beginning of the growth cycle in June 2012, dwelling values have moved 22.6% higher across the combined capital cities. According to Tim Lawless, head of research, this demonstrates the heat emanating from the Sydney market with values up 34.8% cumulatively over the cycle to date across Australia’s largest capital city. Lawless pointed out the latest month on month results show a moderation in the rate of dwelling value growth compared with the December and January figures. The monthly rate of growth slowed from 1.3% in January and 0.9% in December, however the growth trend remains strong, particularly in Sydney and Melbourne. ‘The slower rate of capital gain in February may come as a surprise to some who were expecting lower mortgage rates to instantly propel the pace of home value growth higher. We are already seeing the effect of lower mortgage rates, with auction clearance rates surging to the highest levels we have seen since 2009 and valuation activity reaching new record highs based on daily averages over the second half of February,’ said Lawless. ‘Despite the flurry of activity, it will likely take some time to see this flow through to a higher rate of capital gain. We might not see the lower interest rate environment stimulate the housing market as much as it has in the past,’ he explained. ‘Weaker jobs growth, higher unemployment, declining affordability, low rental yields and political uncertainty are all factors that could dent consumer confidence and provide some counter balance to the rate cuts and quell any additional market exuberance,’ he added. The report also says that there is evidence of compressed rental yields continuing across each of the capital city markets. A year ago the gross rental yield for a capital city dwelling was averaging 4.3% but by the end of February the typical gross yield has been eroded down to just 3.7%, due largely to the consistent high rate of dwelling value growth relative to rental growth. According to Lawless, over the current growth cycle to date, capital city dwelling values have risen at more than three times the pace of weekly rents. ‘The bi-product of such strong capital gains and relatively weak rental growth is that rental yields are being forced lower and lower,’ he said. In Melbourne, the yield profile is the lowest of any capital city with the typical Melbourne dwelling showing a gross yield of just 3.3%. Sydney isn’t far behind with a gross dwelling yield of 3.6%. However, Lawless noted that if Sydney dwelling values… Continue reading
