Housing market report

Transcription

1 Capital city market report Prepared February Dr Andrew Wilson, Senior Economist

2 Year off to a flying start as economic outlook improves National overview Australian capital city housing markets are providing early indications that the solid to strong buyer activity that characterised most capitals through 2013 particularly through the latter part of the year - is set to continue at least through to the middle of. Sydney and Melbourne have each recorded strong weekend auction clearance rates over February well ahead of the results recorded over the same period in Auction listings have surged over February to record late-summer levels as market confidence remains on a high. The Sydney market as yet shows no sign of slowing down from the near-record prices growth recorded over the December quarter The Melbourne market will be fully tested with high auction numbers prior to the Labour Day holiday weekend set to reveal the underlying level of buyer demand. Challenges remain, however, for Melbourne with significant concerns over the performance of the local economy and emerging political instability. Low interest rates are a key ingredient to the current high levels of home buyer activity. Although the Reserve Bank unsurprisingly decided to keep official interest rates on hold at its first meeting for the year, mortgage rates continue to fall as banks increasingly compete for market share. With the Reserve Bank signalling an improved outlook for the economy together with falling mortgage interest rates, the current, once in a decade energy of the Sydney housing market is set to continue. Other markets are also set to benefit from improved affordability from lower rates, although prices growth will be more modest. Higher retail sales, a positive trade balance from a lower dollar and rising business confidence have provided some optimism on the short-term outlook for the economy. The key measure, however, remains the jobless rate with both New Wales and Victoria reporting a significant loss of jobs over Interest rates will remain on hold for the foreseeable future on the proviso that the national unemployment rate remains consistently below 6 percent was the strongest year for national house price growth since 2009 with the median house price increasing by 9.8 percent. All capital cities recorded an increase in median house prices over the calendar year for the first time in four years. Solid end of year buyer momentum in all markets will ensure a positive start to - signs of which are already emerging. Affordability constraints and likely continued subdued economic activity will, however, act to moderate prices growth through the year. Median prices, national Yearly median price growth, Top 10, Dec Qtr 13 Sydney 15.1% Sydney 10.9% 2.9% -1.1% Perth 9.3% -2.4% Melbourne 8.6% 3.6% Darwin Perth 8.4% 8.4% 0.2% -1.8% Darwin Melbourne 6.9% 6.8% -1.6% 6.2% Hobart 5.1% -3.3% Brisbane 5.0% since last month 1.9% Median prices: 3 months to end December 2013 Dec 2013 Quarterly change Yearly change Sydney $763, % 15.1% Melbourne $568, % 8.6% Brisbane $461, % 5.0% Adelaide $446, % 2.8% Perth $605, % 8.4% Canberra $588, % 3.0% Gold Coast $480, % 3.2% National $597, % 9.8% Dec 2013 Quarterly change Yearly change $541, % 10.9% $421, % 6.8% $361, % 0.4% $282, % 0.3% $406, % 9.3% $419, % 1.1% $254, % 1.5% $458, % 8.0% 2 National - February

3 Sydney The Sydney housing market was a significant contributor to national house prices growth in Sydney s median house price increased by an exceptional 6 percent over the December quarter which is the second highest quarterly increase in house prices on record. Sydney house prices surged by 15.1 percent over 2013 which was the strongest rise over a calendar year prices since Sydney s median house price increased by over $100,000 through 2013 to a new record high of $763,169. Sydney unit prices also performed strongly over 2013 increasing by 10.9 percent to $541,992 - also a record. Strong changeover buyer activity in the inner west and the upper north shore were significant contributors to overall prices growth over the second half of 2013, together with record levels of investor activity particularly in the west. Strong buyer activity is set to continue in Sydney early in, although the 2013 rates of growth will be unsustainable over the full year % 19k % -24.3% months % -35.2% Auction clearance rates, Sydney * 80% 70% 60% 50% Median prices, Sydney $800k $700k 40% * uary has been excluded due to low number of auctions QoQ: +8.3% YoY: +16.9% Inner QoQ: +5.9% YoY: +20.0% Can- Bankstown QoQ: +6.8% YoY: +14.7% QoQ: +2.9% YoY: +11.9% Upper QoQ: +11.1% YoY: +21.1% ern Beaches QoQ: +8.2% YoY: +15.5% Lower QoQ: +4.1% YoY: +14.8% City & East QoQ: +6.9% YoY: +16.3% QoQ: +6.9% YoY: +14.0% QoQ: +1.8% YoY: +8.5% Inner QoQ: +3.1% YoY: +9.9% Can- Bankstown QoQ: +3.3% YoY: +9.9% QoQ: +2.0% YoY: +7.0% Upper QoQ: +1.8% YoY: +5.5% ern Beaches QoQ: +2.7% YoY: +8.6% Lower QoQ: +0.9% YoY: +15.2% City & East QoQ: +0.9% YoY: +8.7% QoQ: +3.0% YoY: +9.1% Sydney February 3 Sydney - February

4 Melbourne Melbourne house prices increased solidly over the December quarter, rising by 3.2 percent, with unit prices increasing similarly by 3.1 percent over Melbourne house prices were the second-best performers behind, Sydney increasing by 8.6 percent to a new peak of $568,824. Melbourne s inner-east prestige market and the outer east mid-price range markets were the best performers over Early signs are of continued solid buyer activity in these regions, with each reporting strong weekend auction clearance rates early in February. Challenges remain for the Melbourne market in with declining local economic activity providing a significant headwind to sustained prices growth despite restored confidence and low interest rates. Auction clearance rates, Melbourne * 90% 80% Median prices, Melbourne % 38k % -0.5% months % 8.5% 70% 60% 50% 40% * uary has been excluded due to low number of auctions QoQ: +5.8% YoY: +10.8% QoQ: +8.2% YoY: +9.1% Inner QoQ: +12.3% YoY: +7.4% Inner QoQ: +6.3% YoY: +15.8% East QoQ: +10.3% YoY: +12.2% Inner East QoQ: +2.2% YoY: +12.4% Outer East QoQ: +10.7% YoY: +21.6% East QoQ: +2.5% YoY: +6.6% QoQ: 2.2% YoY: +1.0% QoQ: -1.2% YoY: -0.7% Inner QoQ: +2.3% YoY: +4.7% Inner QoQ: +11.1% YoY: +16.1% East QoQ: +9.9% YoY: +9.9% Inner East QoQ: +4.4% YoY: +11.3% Outer East QoQ: +14.1% YoY: +20.5% East QoQ: +1.6% YoY: +5.0% 4 Melbourne - February

5 Brisbane The Brisbane housing market continues its steady revival with the median house price increasing by 2.1 percent over the December quarter, the best quarterly result in four years. House prices increased by 5 percent over 2013, with unit prices however up by just 0.4 percent. Brisbane house prices are now just 2.2 percent below the previous price peak of June 2010 and closing fast. An improving economy and increased activity from investors are set to accelerate prices growth in Brisbane through above the levels recorded in Unemployment rate by city, Median prices, Brisbane % 26k % 3.7% months % 4.0% Syd Melb Bris Ade Per Can Dar Hob Nat source: ABS Caboolture QoQ: -1.4% YoY: -1.1% NW Inner QoQ: +2.7% YoY: +6.1% Caboolture QoQ: -13.5% YoY: -13.5% NW Inner QoQ: 0.0% YoY: -1.3% Pine Rivers QoQ: +3.2% YoY: +2.8% Inner QoQ: +4.6% YoY: +11.0% Pine Rivers QoQ: -1.5% YoY: -4.3% Inner QoQ: +3.8% YoY: +5.6% NW Outer QoQ: +2.9% YoY: +4.1% SE Inner QoQ: +3.9% YoY: +11.2% NW Outer QoQ: -2.9% YoY: -0.8% SE Inner QoQ: -5.9% YoY: +0.3% SE Outer QoQ: +3.0% YoY: +5.3% Ipswich QoQ: +1.1% YoY: +3.9% Redland QoQ: +1.6% YoY: +1.4% Logan QoQ: -1.1% YoY: +1.8% SE Outer QoQ: -3.5% YoY: -6.2% Ipswich QoQ: -6.0% YoY: -23.9% Redland QoQ: -1.3% YoY: -4.5% Logan QoQ: -12.5% YoY: -34.4% 5 Brisbane - February

6 Adelaide Adelaide is showing positive signs of sustained recovery in house prices with the December quarter median increasing by 1.7 percent the third consecutive quarterly rise. Adelaide house prices rose by 2.8 percent over 2013 while unit prices increased by just 0.3 percent. The Adelaide median house price remains the lowest of all the mainland capitals at $446,153. The Adelaide housing market price cycle is typically less volatile than other capitals. Although significant challenges remain for the underperforming local economy, low interest rates, increased confidence and the lowest median house price of all the mainland capitals should ensure that last year s rising buyer activity will be sustained over albeit at typically modest levels. Adelaide unemployment rate 10% 9% 8% 7% 6% 5% Median prices, Adelaide % 11k % -8.1% months % -0.8% 4% 3% 2% 09 Jul Jul Jul Jul Jul $100k source: ABS QoQ: -1.0% YoY: +0.6% QoQ: -5.5% YoY: -6.0% QoQ: +3.1% YoY: +3.1% East QoQ: +4.0% YoY: +4.2% QoQ: -3.7% YoY: -5.4% East QoQ: -2.1% YoY: -0.2% QoQ: +4.6% YoY: +1.8% QoQ: +3.4% YoY: +4.5% Adelaide February 6 Adelaide - February

7 Perth The Perth housing market recorded another solid year in 2013 with median house prices increasing by 8.4 percent and unit prices up strongly by 9.3 percent. Prices growth resumed over the December quarter after signs emerged of the market plateauing during the previous September quarter. House prices increased by 1.8 percent over the quarter with unit prices up sharply by 3.7 percent. Perth has now recorded eight consecutive quarters of house price growth and six consecutive quarters of unit price growth. Perth s median unit price exceeded $400,000 for the first time at $406,196. The Perth market continues to provide a balance of market activity from buyer types with the highest proportion of first home buyers of all the state capitals. Rising demand, price rises and low interest rates have been the catalyst for a surge in home building over the second half the year with ABS dwelling approvals up 17.3 percent. A continuing strong local economic performance will ensure that the solid prices growth recorded over 2013 in Perth should be maintained through. Median weekly asking rent, houses December 2013 $550 Median prices, Perth % 22k % -1.6% months % 2.5% $500 Perth $450 National $400 $350 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 QoQ: +2.8% YoY: +7.9% Central QoQ: +8.1% YoY: +3.9% East QoQ: 1.2% YoY: +7.6% QoQ: +6.7% YoY: +12.2% Central QoQ: +16.0% YoY: +10.1% East QoQ: +4.7% YoY: +3.1% QoQ: +2.0% YoY: +7.9% East QoQ: +2.2% YoY: +9.7% QoQ: +3.6% YoY: +11.5% East QoQ: +3.2% YoY: +9.0% 7 Perth - February

8 Canberra The volatile Canberra housing market finished the year positively recording a solid increase in the median house price of 2.3 percent to $588,242. This followed a fall of -0.9 percent over the previous September quarter. Unit prices however fell by -0.7 percent over the quarter. Canberra house prices increased by 3 percent over 2013 with unit prices up by 1.1 percent The Canberra market remains exposed to the opposing forces of an underlying chronic shortage of housing and the prospect of ongoing job shedding in the public service a significant contributor to the local economy. Recent strong increases in local dwelling construction are a positive for housing market activity with modest prices growth expected again in. 5.6% 4.5% 4.8% Canberra unemployment rate 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 09 Jul Jul Jul Jul Jul Median prices, Canberra 1.7k -2.4% months 17.7% source: ABS Belconnen QoQ: +2.4% YoY: +1.3% Gungahlin QoQ: -2.8% YoY: +0.2% Belconnen QoQ: +3.8% YoY: +4.5% Gungahlin QoQ: +6.4% YoY: +15.3% QoQ: +6.6% YoY: +10.6% QoQ: +1.5% YoY: +2.2% Woden Valley QoQ: +1.2% YoY: -6.0% QoQ: +5.6% YoY: -6.2% Woden Valley QoQ: -6.8% YoY: -5.7% QoQ: +9.4% YoY: -5.8% Tuggeranong QoQ: +4.3% YoY: +3.2 Tuggeranong QoQ: -1.3% YoY: -2.9% 8 Canberra - February

9 Gold Coast The Gold Coast housing market continues to provide positive signs that recent increases in buyer activity and prices growth is consolidating. Gold Coast house prices increased by 0.9 percent over the December quarter to be up by 3.2 percent over the year. The unit market is also showing signs of stabilising, with prices rising by 1.5 percent the first annual increase since Rising buyer and seller confidence and a strengthening local economy will ensure that the Gold Coast housing market continues to improve in, with prices growth likely to exceed the 2013 results for both houses and units., Gold Coast 200 Median prices, Gold Coast % % % Jul Jul Jul Jul Jul Jul Jul Jul k -3.5% months -13.4% Gold Coast QoQ: +2.8% YoY: +5.8% Gold Coast QoQ: -1.4% YoY: +1.4% Gold Coast East QoQ: +2.2% YoY: +4.4% Gold Coast East QoQ: -2.4% YoY: -0.9% Gold Coast - February

10 Hobart The Hobart market continues on the path to recovery with median house prices increasing solidly by 2.8 percent over the December quarter the third consecutive rise and the best quarterly result for four years. Hobart s median house price increased by a solid 5.1 percent over 2013 but remains -4.1 percent below the previous price peak recorded three years. Local economic performance remains a constraint for the Hobart market but buyer and seller confidence is certainly rising. The prospects are positive that recent house prices growth will continue into. Darwin House price growth in Darwin flattened over the December quarter with the median house increasing by just 0.8 percent and a steady result for the median unit price. House prices however rose by 6.9 percent over 2013 with unit prices up by 8.4 percent. A solid local economy with strong jobs growth driven by the resources sector and an underlying shortage of housing will ensure that prices in Darwin will continue to rise through. Disclaimers APM Disclaimer Published and compiled by ACN Level 2, 1 Darling Island Road Pyrmont NSW In compiling this publication, the Publisher relies upon information supplied by a number of external sources. 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