RP Data’s measure of pre-listing activity by real estate professionals, the Market Activity Index saw a slight increase over the last week with the index sitting at 120.5 points. Despite the slight upwards movement we expect that the level of market activity will continue to trend lower until at least the beginning of the spring selling season.

The Reserve Bank of Australia (RBA) decided to keep official interest rates on hold this week following their board meeting. The result was in-line with market expectations following the release of Consumer Price Index (CPI) figures last week which showed the rate of inflation for the June quarter was 0.6%, which was below forecasts. Also likely to have influenced the RBA’s decision was the fact that capital city home values recorded flat growth during the June quarter and a fall of -0.8% for the month of June according to the RP Data-Rismark Home Value Index. The RBA’s Governor had previously warned that it would not be beneficial to see a continual run-up in house prices and the RBA would likely be buoyed by the recent slowdown.

The Australian Bureau of Statistics (ABS) released Building Approvals data for June. The data showed that during the month total building approvals fell by -3.3% with private sector house approvals down -2.5% and private sector unit approvals increasing by 2.7%. On an annual basis, approvals have headed in the right direction with total approvals increasing 13.2%, thanks largely to a jump in private sector unit approvals which were up 57.7%. However, private sector house approvals have only increased by a miserly 0.5% for the year. Despite the improvement in the number of dwelling approvals on an annual basis, dwelling approvals have been trending lower for the last four months and it appears the higher interest rate environment is impacting adversely on approval volumes.

Advertised Stock on the Market
The number of newly advertised property listings fell by -4.3% last week, the second successive week of declining new property ads. The number of newly advertised listings is now -3.8% below the 12 month average. The total number of advertised listings has fallen for the third week in a row. This is an encouraging sign given that the rate of property market activity is slowing, it is positive to see that total listings are not mounting in concert with the market slowdown.

The results of the RP Data-Rismark Home Value Index for June showed a marked slowdown in activity within the residential property market.

Nationally, the June quarter recorded a fall in capital city dwelling values of -0.2% which was the first quarterly fall in home values in 17 months. The slowdown in market gains has occurred on the back of a higher interest rate environment, housing finance numbers which have been trending lower since September 2009 and a softening of auction clearance rates since late April. Putting the fall in values over the quarter into perspective, on a month-by-month basis capital city property values increased by a total of 15.1% between December 2008 and May 2010.

During the June quarter a number of capital cities recorded a fall in property values: Perth (-2.5%), Brisbane (-1.3%), Hobart (-0.5%), Canberra (-0.8%) and Darwin (-0.1%). Meanwhile the cities recording positive growth in property values during the quarter were: Adelaide (1.1%), Sydney (0.5%) and Melbourne (0.2%).

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Agents of Cayzer Real Estate have sold at auction a retail shop in Port Melbourne, Victoria, with vacant possession.

The property at 65 Bay Street, Port Melbourne, was sold with a retail fitout already in place, allowing or occupation or investment.

Cayzer Real Estate agent, James Keep, marketed the property, which achieved a final selling price at auction of $1.16 million.

The property is understood to comprise of 176 sqm of net lettable retail spaces, situated opposite major retailers and almost adjacent to proposed major mixed developments.

A rear corporate loading bay and an undercover retail carpark were also sold along with the shop.

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The end of the quarter is always interesting because three major residential market indicators are released: the ABS House Price Index, APM’s composition adjusted median house prices, and the RP Data-Rismark Hedonic Home Value Indices. The results are generally similar, particularly in longer trend terms, however at times of market transition (like now) the Hedonic methodology provides a clear lead on the other indices.
 

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