RP Data Housing and Economics

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Capital city home values increased by 0.1% in September, 2.9% over the third quarter and they increased by 9.3% over the past year

• Home values increased by 0.1% across the combined capital cities in September and rose by 2.9% over the three months to September 2014.
• Over the month, home values fell in all capital cities except for Sydney, Brisbane and Adelaide.
• Over the past three months, values increased in every city except for Perth and Hobart.
• Capital city home values rose in each capital city over the past year, the greatest increases were recorded in Sydney (14.3%), Melbourne (8.1%), Darwin (7.1%) and Brisbane (6.4%) with all other capital cities recording value growth of less than 6.0%.
• The annual rate of value growth across the combined capital cities has slowed from a peak of 11.5% in April 2014 to 9.3% over the past 12 months.

Sales activity across the country is higher than at the same time last year but has not returned to the heights reached in late 2013

• Over the 12 months to July 2014 there were 351,738 houses and 140,277 units sold across the country.
• House sales are 10.6% higher over the year compared to an 8.1% rise in unit sales.

Vendor metrics indicate quite strong housing market conditions

• Auction clearance rates are consistently around 70% each week across the combined capital cities.
• Discounting levels and days on market are low although they have increased slightly over recent months.

Rental markets are fairly soft

• The median weekly rent across the combined capital cities is recorded at $481 and rents have increased by 2.1% over the past year.
• Gross rental yields are recorded at 3.8% across the combined capital cities, down from 4.1% a year ago.

Mortgage demand has started to level recently

• The RP Data Mortgage Index (RMI) shows that mortgage demand has begun to level over the past couple of months.
• ABS housing finance data shows a similar trend with the market largely driven by upgraders and investors.

Economic data flows remains mixed

• Population growth is winding down but remains high on an historic basis.
• Dwelling approvals have shifted much higher over the past year and are at their highest ever level on an annual basis.
• With population growth slowing and building approvals remaining high (despite the recent fall) we may see a better relationship between approvals and population growth over the coming years.
• Consumer sentiment has been weak since the Federal Budget and fell again in September.
• The unemployment rate has reduced to 6.1% over the month and despite the monthly falls it sits at its highest level in more than a decade.
• Mortgage rates remain low with banks competing hard for their share of the home loan business.