Tag Archives: australian
Home value growth rate in key Oz cities continues to moderate
Property values across Australia’s capital cities fell by 0.3% in November compared with the previous months as growth continues to slow, according to the latest index. Home values rose in Sydney by 1%, in Brisbane by 0.4%, in Perth by 0.9% and in Hobart by 0.2% but fell across the remaining capital cities, the data from the CoreLogic RP Home Value Index shows. Research analyst Cameron Kusher said this recent slowdown in the rate of capital growth is further highlighted by the fact that over the three months to November 2014, values rose by just 0.8% across the combined capitals. Over the three months, values increased in Sydney, Brisbane and Perth but fell across all other capital cities. The slowdown in capital growth is further evident when looking at annual growth rates. Although combined capital city home values increased by a healthy 8.5% over the 12 months to November 2014, the annual growth rate is now at its lowest level in the year. The data shows that the rate of annual home value growth across the combined capital cities continued to slow after peaking at 11.5% over the 12 months to April 2014. Excluding Hobart, across each capital city the annual rate of capital growth is now lower than its recent peak. Kusher said this suggests that most cities have now moved past their cyclical peak. ‘Importantly, this has become apparent in the two largest capital cities of Sydney and Melbourne, where annual value growth peaked at 16.7% in April 2014 and at 11.9% in January 2014 respectively,’ he explained. ‘Although Sydney and Melbourne appear to have moved through their peaks, capital growth these two cities have consistently been the main driver of value growth over the past 12 months,’ he added. A breakdown of the figures shows that over the past year, Sydney home values increased by 13.2% and Melbourne home values rose by 8.3%. Sydney has seen much stronger growth over the year than Melbourne. However, Melbourne’s growth remains quite higher than the third strongest performing city for capital growth, Brisbane. Brisbane home values increased by 6% over the past year while Hobart at 5.2% is the only other capital city to record annual value growth in excess of 5%. ‘Market indicators such as auction clearance rates remain quite strong, but also point to slightly weaker overall housing market conditions,’ Kusher said. Auction clearance rates reduced noticeably across the two largest auction markets, Sydney and Melbourne, over recent weeks while clearance rates were typically recorded at around the high 70% and mid 70% mark respectively at the start of Spring. Clearance rates are now sitting at a low 70% in Sydney and mid 60% in Melbourne. The number of new properties listed for sale across the combined capital cities continues to trend higher. Although this occurred throughout the last two months, Kusher pointed out it wasn’t until recently that the total number of property listings also started to trend higher. ‘This may indicate a slower rate of sale and is… Continue reading
New home sales in Australia on the up again, latest HIA data shows
New home sales in Australia experienced a modest rise in October after remaining flat the month before, according to the latest report from the Housing Industry Association (HIA). Total seasonally adjusted new home sales increased by 3% and growth was driven by a growth in the sale of detached houses in Victoria and Western Australia. HIA chief economist Harley Dale pointed out that after a relatively sharp decline of 5.7% in July, driven by both detached houses and multi-units, total new home sales have mounted a modest recovery ‘Sales are still off their cyclical peak reached back in April this year, but the overall volume of new home sales is still at an elevated level. That augurs well for healthy new home construction activity persisting into 2015,’ he explained. ‘Australia is on track to commence a record number of homes this year. While undesirable lags in the availability of Australian Bureau of Statistics data prevent confirmation of this outcome until well into next year, the fact is that 2014 is drawing to a close,’ he said. ‘We now want to be seeing evidence pointing to a healthy prognosis for new home building activity in 2015. In this regard we have positive signals coming from three key leading indicators. HIA new home sales and ABS building approvals are past their peaks but remain at elevated levels. Lending for new housing is still trending higher and doesn’t appear to have peaked yet,’ he added. A breakdown of the figures show that detached house sales increased by 4.7% in Victoria and by 24.8% in Western Australia but fell by 3% in New South Wales and were down by 7.8% in Queensland and 1.7% in South Australia. Over the three months to October 2014 detached house sales increased by 3.7% in New South Wales, by 1.2% in Queensland and by 1.7% in Western Australia. They fell by 13.4% in Victoria and by 6.3% in South Australia. Continue reading
Home building reaches a new high in Australia
This year has seen a record number of new homes being built in Australia, according to the latest outlook report from the Housing Industry Association. However, the growth in new residential construction has been slower to gather momentum and breadth in terms of both geographical location and dwelling type, it says. According to HIA chief economist, Dr Harley Dale, this means that the ‘look and feel’ of this building cycle is different to historical experience. ‘In aggregate, we will commence nearly 190,000 new dwellings in 2014, surpassing the previous record of 187,000 back in 1994,’ said Dale. ‘The momentum culminating in this milestone has provided a substantial boost to Australia’s economy at a crucial juncture in the cycle. Below trend economic growth and weak labour market outcomes would be considerably worse without the reach a new home building recovery is exerting into the broader economy,’ he explained. He pointed out that against this backdrop the HIA believes it is unfortunate that policy makers have failed to grasp the reform initiative required to compliment record low borrowing costs and send new home building levels higher still in 2015 and 2016. ‘Australia’s economic growth and labour market performance will be weaker than otherwise as a consequence of this lack of policy action. Record low borrowing costs have combined with other factors such as high net overseas migration to unleash substantial pent-up demand for new housing,’ said Dale. ‘These factors will keep the level of new homes commenced at historically elevated levels. However, what the economy needs is further growth in new home building over the next couple of years, but that will only occur as a consequence of taxation and regulatory reform,’ he pointed out. ‘It is still an impressive achievement to build a record number of new homes, at a level that approaches what the average build rate will have to be if we are to adequately house our growing and ageing population in coming decades,’ he said. He explained that renovations investment has not joined the new housing ride this cycle, increasing by only 0.3% in 2013/2014 from a decade low. ‘Unemployment concerns, a lack of available credit, and an elevated household savings rate are but three elements in the current environment which mean there has not been room for a renovations recovery alongside new home building activity and existing property price growth,’ said Dale. But he pointed out that that situation looks to be slowly changing as growth of 0.9% in renovations investment in 2014/2015 is forecast to accelerate to 2% growth in the subsequent three years. ‘That would be a great outcome, but it is a long road back for this important sector of Australia’s domestic economy,’ Dale concluded. Continue reading
