RP Datas measure of real estate professional pre-listing activity, the Market Activity Index was relatively flat during last week. As it moves ever closer to Christmas we expect that pre-listing activity will begin to moderate in coming weeks as the festive period slowdown approaches.
Industry Market Wrap
The ABS released housing finance data for September which showed an improvement in the number of home loans being taken by owner occupiers. Over the month total owner occupier finance commitments increased by 1.3% which was the third successive month in which they have improved. The improvement in this number was due to a 0.5% increase in finance for construction of new dwellings and a 1.6% increase in finance for the purchase of established dwellings. The rises were offset by a -3.2% fall in commitments for the purchase of new dwellings. Overall it is encouraging to see some recent improvement however, total owner occupier commitments are almost 25% lower than at the same time last year. Looking at the total value of finance commitments, both owner occupier (0.6%) and investment (1.7%) commitments improved during the month. Although more homes are being financed, owner occupiers are borrowing less with the average first home buyer loan size falling by -1.3% for the month and non-first home buyer loan sizes down by -0.8%. The data also shows there has been a slight improvement in first home buyer numbers; they now account for 15.9% of all owner occupier finance commitments up from 15.5% last month.
Westpac and the Melbourne Institute released the November results of their monthly Consumer Confidence Survey this week and the index recorded a fall of -5.3% over the month. The Index is currently recorded at 110.7 points and despite the fall over the month it remains well above 100 points indicating that consumers remain more optimistic than pessimistic. A subset of the consumer confidence data is the Time to Buy a Dwelling Index. With property value growth slowing and interest rates having been raised in early November the Index fell by -7.4% during the month. The Index is now recorded at 102.2 points which indicates that consumers are only slightly more optimistic than pessimistic about it being a good time to buy residential property.
Advertised Stock on the Market The number of new properties advertised for sale increased by 3.7% this week. Despite the fact that lead indicators indicate softening conditions, vendors continue to bring their properties to the market. As a result of the increasing number of new listings, the total number of properties advertised for sale has also increased over the week, up 1.7%. The total number of property listings is now 12.8% higher than the 12 month average level.
With fewer houses on the market this Spring, it's even more important to find out what exactly is happening on your patch. Make sure you have subscribed to RP Data's On the Market® service. Click hereor phone 1300 734 318 for a free 2 week trial.
Latest National Auction Clearance Rates Across the combined capitals the weighted average auction clearance rate was recorded at 52.1% last week down from 53.4% the previous week. Even though clearance rates are approaching 50%, the volume of auctions remains strong with more than 1,800 capital city auctions last week. In Melbourne, clearance rates fell from 61.36% the previous week to 54.8% last week and in Sydney clearance rates were recorded at 53.8%, down from 58.7% the previous week.
Our auction results change weekly - want to know the auction results for your local area? Log into rpdata.com and go the Auction Results panel on the top right corner of the home page.
Number of Properties Advertised for Rent The number of new rental advertisements increased by 7.7% last week and are 4.6% higher than they were at the same time last month. As a result of the increase in new rental ads, total advertisements have increased by 3.6% and are now 0.2% higher than last months. Despite the increase this week, RP Data expects that rental markets will continue to tighten in coming months, especially considering the RBAs decision to lift official interest rates last week which will make it tougher for renters to enter into home ownership.
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Article: Capital gains and rental markets
over five years
During the last five years, capital gains in the housing market have been lower than the preceding period however, conditions have been such that rents and values have increased by fairly equivalent amounts during the period.
During the five years to September 2010, the Australian residential property market has experienced a variety of conditions, modest growth conditions in 2005/06, rapid appreciation in 2007, falling values in 2008 followed by another strong growth phase in 2009/10. Despite the range of conditions over this five year period, overall property values have increased at the average rate of 7.1% year on year.
Property values across the combined capital cities have increased by a total of 40.5% for houses and 42.2% for units over the last five years. On an average annual basis this represents growth of 7.0% for houses and 7.3% for units. In dollar terms, house values have increased by a total of almost $140,000 over the last five years and unit values have increased by approximately $123,000.
An industrial property in Blackburn, Victoria, has been sold at auction by agents of DTZ to an owner occupier.
Comprising two factory units, the property located at 21-23 Cottage Street, Blackburn, was sold subject to a current lease over one of the units.
DTZ agent, Richard OCallaghan, marketed the property, which achieved a final selling price at auction of $1.115 million following competition from three bidders.
The purchaser is understood to be a local commercial and industrial builder, proposing to refurbish and occupy the 574 sqm vacant component and then to take over the currently leased component when that lease expires.
Unit 21, with a building area of 331 sqm, is currently tenanted as an automotive workshop for $29,970 per annum until 2013.
Mr OCallaghan said that the 1350 sqm site, with street frontage of approximately 37 metres, is situated in a very tightly held position close to Blackburn railway station and the Blackburn Road junction.
The area has a strong automotive flavour including a number of major dealerships and servicing businesses nearby, said Mr OCallaghan.
Based on other recent rare sales in the area I was expecting this property to realise in the $1.1 to $1.2 million range on an assessment of its land value alone.
Blog: Unemployment increases but read beyond the headlines
The unemployment data released by the Australian Bureau of Statistics this week showed that on a seasonally adjusted basis the national unemployment rate increased from 5.1% in September to 5.4% in October 2010. Importantly, this result does not tell the whole story.
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Comprising two factory units, the property located at 21-23 Cottage Street, Blackburn, was sold subject to a current lease over one of the units.
