RP Data’s Property Plus market update for the week ending June 22, 2014 provides a quick recap on the performance of the housing market as the month brings the financial year to a close.

The current growth phase is now two years old with capital city real estate values broadly having started to increase in June 2012. The past financial year has seen dwelling values rise by about 9.7% compared with a 3.8% capital gain over the 2012/13 financial year. Sydney has been the primary driver of capital gains, with values up almost 15% over the financial year, followed by Melbourne where capital gains will end the year around 8% higher. Brisbane with 6.8%, Darwin at 6.6%, Perth 5.5%, Adelaide 3.0%, Hobart 2.3% and Canberra 2.2% mark the performance of other capital cities.

While growth conditions have been very strong in the current phase, the rate of capital gain does not match up to previous growth cycles. For instance, in 2001/02 values moved 20.7% higher and the year after values were 15.8% higher. Over the previous growth cycle, the 2009/10 financial year saw capital city dwelling values rise by 12.3%.

Rising consumer confidence

The latest Roy Morgan consumer confidence survey shows a 2.4% increase in confidence levels over the week and the reading is now 6.4% higher since the recent post budget low recorded by the index on May 25. The gradual improvement in confidence levels is an encouraging sign that federal budget shock is starting to dissipate.

Rising export volumes forecast

The Bureau of Resources and Energy Economics of the Federal Government has indicated further reductions in key commodity prices but is also forecasting rising export volumes across the resources and energy sector as the production phase gathers pace on the back of previously significant infrastructure investment.

Auction clearance rates steady

Auction clearance rates held steady over the week with the capital city weighted average clearance rate recorded at 65.4%, virtually the same as the final clearance rate from the week before (65.5%). There were 2,040 auctions held over the week compared with 1,655 over the same week a year before.

The major auction markets of Sydney and Melbourne continued to record healthy auction results with Sydney’s clearance rate at 70.1% across 663 reported auctions, slightly higher than the previous two weeks results, and Melbourne’s auction market recording a clearance rate of 69.1% across 846 collected auction results. The clearance rate in Melbourne over the past two weeks has moved higher compared with the previous two months where clearance rates were averaging in the low 60s.

New property listings

Over the four weeks to 22 June, there were 37,444 newly advertised properties listed for sale nationally. New listing numbers have continued to trend lower, attributed to a seasonal phenomenon. Nationally, new listings have moved 2.9% lower than a year ago, while across the combined capital cities new stock being added to the market is virtually on par with the same time last year (0.8% higher).

There are currently 244,540 properties listed for sale across the country. Total listings at a national level are 1.0% lower than last year. Across the combined capital cities, total listings remain 5.3% lower than a year ago, highlighting reduced total stock levels.