Housing market report

Transcription

1 Australian capital cities and Gold Coast residential property market Prepared May Dr Andrew Wilson, Senior Economist Australian Property Monitors

2 Housing markets strengthen as rates fall again. National overview Australia s housing markets continue to build on the solid start to the year driven by historically low interest rates, rising confidence and continuing solid performances by most local economies. Housing markets have recorded the best start to a year since the strong market conditions of 2010 three years ago. Most capitals have recorded increases in median house prices this year with the national house price up by 2.7 percent over the year ending March. Auction clearance rates and home loan data are also tracking well ahead of the same time last year with buyer and seller activity in most markets clearly on the rise. Market outcomes however still remain somewhat patchy with activity levels varying between capital city markets and market segments. Housing markets are set to rise through autumn and into winter, particularly given this month s unexpected cut in official interest rates by the Reserve Bank. The rate cut indicates concerns by the Bank over the recent performance of the economy, particularly in regard to declining national income. Some sections of the Australian economy are clearly still in need of further stimulus with the Reserve Bank choosing to act while inflationary pressures remain benign. Lower interest rates and rising home buyer confidence are set to continue to generate house price growth, although the performance of local economies as usual remains the key. Latest ABS unemployment data for il however is encouraging with the national rate falling to 5.5 percent. Falling unemployment, lower interest rates and a rising stockmarket will continue to fuel increasing housing market activity and prices growth in most capital city markets. Median prices, national 16% 14% % 10% 8% 6% 4% 2% Cash rate Mar Sep 0 May 91 May 92 May 93 May 95 May 96 May 97 May 98 May 99 May 00 May 01 May 02 May 03 May 04 May 05 May 06 May 07 May 08 May 09 May 10 May 11 May May 13 source: RBA Median prices: 3 months to end March Median price Quarterly change Yearly change Sydney $673, % 4.2% Melbourne $538, % 3.7% Brisbane $438, % 1.4% Adelaide $427, % -1.7% Perth $565, % 5.2% Canberra $567, % 0.1% Gold Coast $470, % 3.4% National $551, % 2.7% Median price Quarterly change Yearly change $473, % 1.7% $402, % 1.7% $346, % -5.3% $280, % -2.0% $371, % 1.4% $398, % -2.3% $337, % -8.8% $417, % 0.7% National May 2

3 Sydney The Sydney housing market continues to strengthen with il s auction clearance rate of 65.4 percent, the third highest il result over the past 10 years behind only 2010 at 69.4 percent and 2002 at 75.9 percent the highest ever recorded. Auction clearance rates are a reliable indicator of house prices growth and the rate has continued to rise through the year, indicating increased buyer activity. Listing numbers however have remained relatively stable and are just slightly higher than the same period last year. Investors are a key driver of the Sydney market and currently account for half of buyer activity. New Wales currently contributes 36 percent of all residential housing activity in Australia. Investors and mid-range upgraders are currently highly active in Sydney, with both the first homebuyer market and the prestige market remaining relatively subdued although this is unlikely to remain the case for long. Auction clearance rates, Sydney * 80% 70% 60% 50% Median prices, Sydney $700k Auction clearance rate 67% % 26k 50% % -17.4% 57% % % 40% Oct Oct Oct Oct Oct Oct Oct 11 Oct 13 Mar Sep * January has been excluded due to low number of auctions QoQ: +1.1% YoY: +4.7% Inner QoQ: +2.2% YoY: +4.5% Can- Bankstown QoQ: -1.7% YoY: +4.7% QoQ: +3.6% YoY: +6.6% Upper QoQ: +1.0% YoY: +4.4% ern Beaches QoQ: +1.7% YoY: +7.5% Lower QoQ: -0.4% YoY: +1.5% City & East QoQ: +8.0% YoY: +8.2% QoQ: -0.1% YoY: +3.3% QoQ: -3.4% YoY: +0.6% Inner QoQ: 0.0% YoY: +1.4% Can- Bankstown QoQ: -4.6% YoY: +4.1% QoQ: +0.2% YoY: +3.9% Upper QoQ: -6.0% YoY: -1.3% ern Beaches QoQ: -3.6% YoY: -2.5% Lower QoQ: +2.5% YoY: +4.2% City & East QoQ: -1.6% YoY: +0.7% QoQ: -2.1% YoY: +3.2% QoQ: Quarter on quarter change in median price. YoY: Year on year change in median price. Current period is 3 months to end of March. Sydney May 3

4 Melbourne Similar to Sydney, Melbourne s auction market is recording its best results in three years and is a clear driver of house price growth. Melbourne s weekend auction clearance rates are averaging 69 percent so far this year which is 10 percent higher than for the same period a year ago. Unlike Sydney however, the Melbourne market is receiving a more even contribution from its various market segments. Investors, first home buyers and mid-range upgrade buyers are all relatively active. Melbourne s prestige market however continues as the principal driving force, with strong competition for properties in the leafy inner suburban areas driving solid prices growth. Despite this growth Melbourne s prestige market remains percent below its previous price peaks recorded in Auction clearance rates, Melbourne * 90% 80% 70% 60% 50% Median prices, Melbourne Auction clearance rate 67% % 38k 54% % -.8% 64% % 16% 40% Oct Oct Oct Oct Oct Oct Oct 11 Oct 13 Mar Sep * January has been excluded due to low number of auctions QoQ: +2.3% YoY: -0.6% QoQ: +4.9% YoY: +7.5% Inner QoQ: +10.0% YoY: +10.0% Inner QoQ: +5.8% YoY: +3.5% East QoQ: +0.3% YoY: +4.9% Inner East QoQ: +5.0% YoY: +2.4% Outer East QoQ: +3.1% YoY: +5.2% East QoQ: +1.7% YoY: +2.8% QoQ: -2.6% YoY: -1.1% QoQ: -0.3% YoY: -1.3% Inner QoQ: +1.4% YoY: -1.6% Inner QoQ: +8.8% YoY: +1.7% East QoQ: +0.7% YoY: +8.0% Inner East QoQ: +3.1% YoY: -4.8% Outer East QoQ: +4.8% YoY: +1.6% East QoQ: +2.4% YoY: +3.6% QoQ: Quarter on quarter change in median price. YoY: Year on year change in median price. Current period is 3 months to end of March. Melbourne May 4

5 Brisbane The Brisbane housing market continues its gradual recovery with consistent, although small, house price increases recorded over most of the past year. Investors and mid-range upgraders are currently the main driving force behind the Brisbane market with first home buyers and the prestige market still relatively subdued. Increased activity from investors however can be expected with Brisbane returning some of the best gross investment yields of any capital city market. The local economy is a key ingredient of sustained home buyer activity in Brisbane following a significant decline last year. Latest news is positive with the Queensland il unemployment rate falling sharply from 5.9 percent to 5.6 percent. Gross rental yield by city, March 6% 5% 4% 3% 2% 1% 0% Median prices, Brisbane Mar Sep Auction clearance rate 40% % 25k 31% 8 7.9% -6.5% 33% % 3.4% Syd Melb Bris Ade Per Can Dar Hob Nat, houses only Caboolture QoQ: -2.6% YoY: -4.2% NW Inner QoQ: -2.4% YoY: +3.1% Caboolture QoQ: -.7% YoY: -14.2% NW Inner QoQ: -0.5% YoY: -1.8% Pine Rivers QoQ: 0.0% YoY: +0.6% Inner QoQ: +1.5% YoY: +3.1% Pine Rivers QoQ: -6.1% YoY: -4.8% Inner QoQ: -6.7% YoY: -3.1% NW Outer QoQ: -1.1% YoY: +1.1% SE Inner QoQ: +0.4% YoY: +3.0% NW Outer QoQ: -1.4% YoY: -5.9% SE Inner QoQ: -1.3% YoY: -8.4% SE Outer QoQ: -0.6% YoY: +3.2% Redland QoQ: -0.4% YoY: +5.1% SE Outer QoQ: +4.2% YoY: -0.1% Redland QoQ: -4.2% YoY: +5.6% Ipswich QoQ: +4.1% YoY: +1.6% Logan QoQ: -1.4% YoY: +3.2% Ipswich QoQ: -13.7% YoY: -21.6% Logan QoQ: -19.2% YoY: -28.3% QoQ: Quarter on quarter change in median price. YoY: Year on year change in median price. Current period is 3 months to end of March. Brisbane May 5

6 Adelaide The latest fall in interest rates will provide a sorely needed stimulus to both the local housing market and economy. Buyer activity and house prices growth remains subdued in Adelaide reflecting an underperforming local economy. The latest ABS unemployment rate for Australia, although still relatively high at 5.7 percent, is nonetheless heading in the right direction, having fallen by 1 percent over the month. Low interest rates and an improved local economic performance will help to slowly revive Adelaide s housing market over the remainder of autumn and into winter. Unemployment rate, by state il 8% 7% 6% 5% 4% 3% 2% Median prices, Adelaide % k % -5.7% % 13.8% 1% 0% $100k Mar Sep Syd Melb Bris Ade Per Hob Dar Can source: ABS QoQ: 0.0% YoY: +3.0% QoQ: -4.6% YoY: -2.1% QoQ: -1.2% YoY: +1.2% East QoQ: +1.5% YoY: -0.9% QoQ: -1.8% YoY: -1.8% East QoQ: +1.5% YoY: +4.6% QoQ: 0.0% YoY: +3.3% QoQ: -2.0% YoY: -3.0% QoQ: Quarter on quarter change in median price. YoY: Year on year change in median price. Current period is 3 months to end of March. Adelaide May 6

7 Perth Perth remains a powerhouse of housing market activity driven by a surging population attracted to Australia s strongest local economy. House prices in Perth are now 5 percent higher than a year ago and can be expected to continue to increase steadily over the coming months. Perth has the highest level of first home buyers in the market of any capitals, driven by steep increases in rents for both houses and units. Median weekly asking rent, houses March $510 $490 $470 $450 $430 $410 $390 $370 $350 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Mar Perth Jun National Sep Dec Median prices, Perth Mar Sep % 21k % -6.8% % 1.2% QoQ: -0.6% YoY: +4.5% Central QoQ: -5.6% YoY: +6.1% East QoQ: +0.4% YoY: +5.6% QoQ: -0.8% YoY: -1.6% Central QoQ: +4.7% YoY: +3.4% East QoQ: -2.8% YoY: +1.9% QoQ: -2.5% YoY: +0.1% East QoQ: +1.1% YoY: +6.7% QoQ: 0.0% YoY: -0.5% East QoQ: +3.1% YoY: +2.9% QoQ: Quarter on quarter change in median price. YoY: Year on year change in median price. Current period is 3 months to end of March. Perth May 7

8 Canberra The Canberra housing market remains stalled with prices growth largely flat over the past months. This is largely due to the state of the local economy with concerns over job security impacting on buyers. The recent announcement of a growing federal budget deficit and the likelihood of more fiscal consolidation as a result will continue to retard activity in the housing market. Canberra s latest unemployment rate, although steady at 4.6 percent over il, still remains relatively high for the national capital Unemployment rate, ACT Median prices, Canberra 5.0% 4.9% 4.9% Oct Oct Oct Oct 11 Oct Sep 13 Mar Sep 1.8k 7.7% 29.4% source: ABS Belconnen QoQ: -4.0% YoY: -1.2% Gungahlin QoQ: -0.1% YoY: +0.0% Belconnen QoQ: +4.5% YoY: +6.8% Gungahlin QoQ: +2.5% YoY: -0.3% QoQ: +3.7% YoY: -1.8% QoQ: -5.4% YoY: -2.4% Woden Valley QoQ: -8.0% YoY: -1.5% QoQ: -6.0% YoY: +0.5% Woden Valley QoQ: -19.9% YoY: -.6% QoQ: -6.3% YoY: -5.7% Tuggeranong QoQ: +0.6% YoY: +1.7% Tuggeranong QoQ: -1.5% YoY: 0.0% QoQ: Quarter on quarter change in median price. YoY: Year on year change in median price. Current period is 3 months to end of March. Canberra May 8

9 Gold Coast The Gold Coast is showing some early signs of revival after a prolonged period of subdued prices growth, and buyer activity. Sales of upper-price level apartments have shown some recent growth although sustained growth in the market generally remains a medium-term prospect. The remainder of this year however will see the Gold Coast market move off its recent lows , Gold Coast Median prices, Gold Coast % 11.7% 9.8% Oct Oct Oct Oct Oct Oct Oct 11 Oct 13 Mar Sep 10k -20.2% -.7% Gold Coast QoQ: +1.9% YoY: +6.0% Gold Coast QoQ: -0.4% YoY: -8.3% Gold Coast East QoQ: +0.2% YoY: +3.4% Gold Coast East QoQ: -0.1% YoY: -11.0% QoQ: Quarter on quarter change in median price. YoY: Year on year change in median price. Current period is 3 months to end of March. Gold Coast May Copyright Australian Property Monitors. Any reproduction of or reference to any part of this report must attribute Australian Property Monitors as the source.

10 Hobart Hobart s housing market remains subdued with prices 3.3 percent below the level of a year ago. Lower interest rates will act to improve affordability in combination with lower house prices. The performance of the Hobart economy however remains a significant concern with the Tasmanian unemployment rate increasing over il from 7.3 percent to 7.5 percent still clearly the nation s highest capital city rate. Darwin The Darwin housing market continues to steam ahead, driven by a strong local economy, high rents, housing shortages and a surging population. Price growth in the northern capital is set to reach near 10 percent this year with prices already up 5.4 percent over the past year. Data contained in this report is subject to revision as a result of time lags with the reporting and collection of sales transaction data. This monthly housing market report is produced for and used by both APM and Domain. Hobart and Darwin May 10