January 2017 Property Market Update


January 31, 2017

January 2017 Property Market Update

The Australian property market is steady with capital city dwelling prices still rising. However, this growth is slower than 12-months ago, with the number of properties on the market now higher. But, in comparison, total settlement numbers are less. Overall, the Australian economy remains buoyant.

Most Australian capital cities have seen an increase in property values over the last month. Adelaide, Darwin, and Canberra markets saw monthly price adjustments. Nonetheless, Perth and Darwin markets, which have seen declines for some time, are now nearing their bottom. Consequently, some areas in these states are already starting to gain in value. Sydney and Melbourne markets, in contrast, continue to grow in value, with increased demand, as do the remaining Australian capitals.

Capital City Home Values and Medians

Capital City

Median Dwelling Price

Monthly Change in Dwelling Value

YOY Change in Dwelling Values

Total Gross Return

Brisbane

$470,000 0.6% 3.6%

8.1%

Canberra

$568,000

-0.3% 9.3%

13.9%

Darwin

$465,000

-0.1% 0.9%

6.1%

Hobart

$343,500

3.3% 11.2%

17.2%

Perth

$482,000

1.4% -4.3%

-0.6%

Adelaide

$415,000

-2.0% 4.2%

8.6%

Melbourne

$600,000 3.1% 13.7%

17.1%

Sydney

$800,000

0.9% 15.5%

19.2%

Source: CoreLogic RP Data

 

Home values nationally, increased by 1.4 percent during December 2016, according to CoreLogic. As a result, over the last 3-months, dwelling values rose by 2.7 percent. Moreover, on an annual basis, home prices increased by 10.9 percent.

Annual Change in Dwelling Values

National

12-month

Over 5-years Over 10-years

Median Value

Houses

11.6%

7.4% 5.9%

$650,000

Units

5.9%

5.6% 5.3%

$536,000

Dwellings

10.9%

7.1% 5.8%

$615,000

Source: CoreLogic RP Data

Number of Dwellings for Sale

Property experts suggest that higher dwelling prices are encouraging sellers into the market. For this reason, dwelling sale number are higher than 12-months ago, with 25,353 new homes listed nationally. Hence, newly advertised properties were 17.4 percent higher than 12-months ago and 17.5 percent higher across joint capitals. Over the month, 214,577 properties listings occurred. This figure was 17.4 percent higher than 12-months ago and 17.5 percent higher across combined capitals.

Nationally, total dwelling stock has depleted by 1.9 percent. However, stock is 3.7 percent higher in the joint capitals.

Number of Settled Dwellings

Despite an increase in the number of dwelling for sale, settlements were down. Across combined capitals, an estimated 198,260 houses and 97,160 units sold over the 12-months to December 2016. Subsequently, house settlements were down by 10.5 percent and units down by 14.3 percent. Countrywide, 331,005 houses and 134,364 units sold over the same 12-months. Therefore, house sales declined by 7.3 percent and units by 12.2 percent over the year. Market experts suggest the decline in settlement is due to talk of rate rises.

Economic Data

While the housing market stays steady, the Australian economy continues to send mixed messages. New lending for owner-occupiers and investors fell during the month. Though, investor lending has increased, while owner-occupier demand has declined. Housing credit is now well below the Australian Prudential Regulation Authority’s (APRAs) 10 percent threshold.

On the construction front, dwelling approvals fell over the month. Although, the level of construction has increased with more detached homes and a large uplift in unit construction. Evidence suggests that much of the unit construction is due to offshore investment. The number of units under construction, and approved are at record highs, with many nearing completion over the coming years. This oversupply will suppress unit prices, which are already depreciating. Nevertheless, consumer sentiment stays high, despite lenders raising rates independent of the Reserve Bank of Australia (RBA).

Overall, the housing market continues to see values increase due to the low cash rate, strong demand, and increased capital return. Interest rates and demand, according to economists, will remain steady throughout 2017, which, in turn, will continue to push up property prices.


Written by Refinancing.com.au

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