There were mixed results reported in the latest CoreLogic Home Value Index for the month of November 2016.
The index revealed capital city house prices rose 0.2 per cent, led by strong increases in Darwin, Hobart and Sydney markets, however surprisingly Melbourne was the worst performer.
In the Victorian capital city, house prices dropped by 1.5 per cent over the month to $623,500, despite being the second best performing city over the past year. Apartment prices in the city also fell by 3.2 per cent.
According to Tim Lawless, CoreLogic’s Head of Research, the decrease in prices experienced in Melbourne could be due to an increase in the supply of apartments in the city.
“It appears that higher unit supply is progressively weighing down the capital gains across Melbourne’s unit sector, with annual capital gains tracking at 3.9 per cent for Melbourne units compared with 12.2 per cent annual gain in Melbourne house values,” said Mr Lawless.
Darwin was the capital city which experienced the strongest price growth, with a 3.7 per cent increase in home values, reaching a median of $480,000.
Sydney continues to be the most expensive city to buy, with prices increasing a further 0.8 per cent over the month to $845,000.
Hobart remains the cheapest of the capital cities. While the city experienced a 0.9 per cent price growth over the month, the median dwelling value sits at just $336,000.
The latest rental vacancy data from SQM Research found that nationally vacancies rose in November to 2.5 per cent, up from 2.3 per cent recorded during October.
While Sydney had a vacancy rate of just 1.9 per cent, it still had the highest number of vacant properties with 11,962.
Perth was the capital city with the highest vacancy rate, sitting at 4.9 per cent, and followed Sydney with the next highest number of empty properties with 10,273.
Hobart, with only 158 properties vacant and a 0.6 per cent vacancy rate, remains the countries tightest rental market.
Nationally there were 78,629 residential properties lying vacant recorded according to the SQM Research November report.
Despite the number of properties lying vacant in Sydney, the city continues to experience increases in weekly rents for houses.
According to the SQM Research Weekly Rental Index for the week ending the
12th of December 2016, house rents in the New South Wales capital grew by 4.4 per cent when compared to the previous week, reaching $735 for houses. Weekly rents for units in Sydney experienced only a modest reduction of 0.1 per cent over the week.
After seeing a dramatic rise of 9.7 per cent in weekly rents for houses during November, the latest December weekly rental index showed that Darwin rents continue to climb, increasing a further 0.7 per cent to approximately $551 per week. However, over a twelve month period rents for the Northern Territory capital are down for both houses and units by 0.7 and 2 per cent respectively.
Hobart was the other major capital city to experience falling rents when compared to the previous week. The cost to rent a house dropped 5.1 per cent to approximately $352 and the cost to rent a unit dropped 4.3 per cent to approximately $304.
The capital city which saw the most significant change on weekly rents for houses was Canberra, up 7.8 per cent to approximately $540.
Towards the end of November, the Australian Bureau of Statistics released the latest building approvals data for October2016.
The report showed that building approvals have continued to slump. After seasonal adjustments, the report showed the total number of dwelling units approved decreased by 12.6 per cent over the month to 16,279.
Over the space of one year, there has been a substantial drop of 24.9 per cent in the total number of dwelling units approved.
Finance and interest rates
When the Reserve Bank of Australia (RBA) delivered their decision at the 6th of December 2016 board meeting (the last meeting for the year) they decided again to keep the cash rate on hold at 1.5 per cent.
Despite the record low cash rate, many banks are lifting interest rates. All four of the big four banks have increased interest rates for property investor loans and it has been widely predicted that interest rates for owner-occupiers may rise in 2017 too.
The changes could be a result of increased uncertainty on global debt markets, particularly following the recent US election.
A recent ANZ-Roy Morgan Consumer Confidence Report also gauged that confidence has fallen by 4.4 per cent, the lowest level recorded since May 2016. This comes on the back of Australia’s AAA credit rating being placed on a negative watch by Standard & Poor’s and fears that the economy could be heading towards a recession.
Auction clearance rates
While confidence is down and banks are lifting interest rates, it doesn’t seem to be having an impact on Australia’s auction clearance rates.
Summer is traditionally a period when the market slows, but this year there have been more auctions held at this time than in the past.
The most recent data released by CoreLogic for the week ending the 11th of December 2016 reported that there were 3,411 property auctions held during the week and a preliminary national clearance rate of 74.6 per cent was achieved.
The results marked the twentieth consecutive week where clearance rates were above 70 per cent.