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
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.