Property Pulse
18 November 09
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Weekly Property Pulse Professional Edition
18 November 2009 -
This week's edition covers... |
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RP Data's weekly leading indicator of market activity increased slightly over the last week, indicating that activity in the real estate professional community remains very healthy. The rate of increase has slowed and it is anticipated that a further slowdown is just around the corner as we head closer to the traditionally quiet Christmas/New Year period. |
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Housing finance data released by the ABS this week showed that finance commitments surged during September. In particularly there was a strong bounce back in first home buyer loans which was not surprising given that it was the last month in which the First Home Buyers Grant Boost was available in full. Moving, forward it is anticipated first home buyer volumes will gradually fall back to long term averages and the volumes of finance commitments will also move back toward more average levels as interest rates increase return to historic levels, resulting in a lower level of market activity.
Weekly Key Statistic - discounting and time on market
 Over the last 12 months most capital cities have seen the level of vendor discounting fall. As value growth has returned to the market in 2009 the price expectation of the vendor has become more closely aligned with what the purchaser is willing to pay and negotiation has reduced. Similarly the average number of days on the market for property listings has also fallen over the last year. The improvement is mainly due to the stronger selling conditions over this period and lower negotiation levels resulting in sales occurring in a shorter time period.
Latest National Auction Clearance Rates
 Auction markets around the nation are still achieving strong clearance rates, although the percentage of successful auctions have softened this week with a national weighted average clearance rate of 72%. The largest markets, Sydney and Melbourne, recorded clearance rates of 73% and 80% respectively.
Want to know the auction results for your local area? Login to
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and go the Auction Results panel on the top right corner of the home page.
Advertised Stock On The Market
 New listings to the market have slipped again this week and now sit below 47,000 for the first time in 8 weeks. With the Christmas / New Year slowdown imminent it is anticipated that the rate of stock additions will continue to cool in coming weeks. Total stock listings have continued to fall indicating that properties available on the market are continuing to sell at a faster rate than stock is being added.
Want to know what is happening in your local patch? Make sure you have subscribed to rpdata's On the MarketŪ service. Click here or phone 1300 734 318 for a free 2 week trial. |
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Renting or owning a home - which is best?
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The Australian Bureau of Statistics (ABS) recently released data on housing occupancy costs which threw up some intriguing results.
The recently released ABS statistics have found that relative to gross household incomes, the average Australian with a mortgage is paying just 18% of their gross income towards their housing cost. At the same time, renters are paying 17% of their gross income in housing highlighting that the difference between rental costs and ownership costs is not as great as many think. Also, this data is based on the 2007-08 financial year, prior to the time when the GFC hit and the Reserve Bank dropped interest rates to 49 year lows.
On a state-by-state basis, residents of New South Wales have the greatest housing occupancy costs whilst Tasmanians enjoy the lowest average costs. The results highlight the benefit of getting the mortgage paid off, nationally home owners would be $351/week better off without a mortgage.
Rental accommodation is most expensive in the ACT and is most affordable in Tasmania.
When looking at costs nationally from 1994-95 to 2007-08, housing costs for those without mortgages have remained virtually unchanged. For those with a mortgage, housing costs have risen by a total of $112/week in 13 years, which represents an average annual growth rate over the period of 2.7%.
Meanwhile the cost of renting over the 13 years has increased from $169/week to $237/week an average annual growth rate of 2.6%, almost the same annual rate of growth as the increase witnessed for those paying off a mortgage. Over the same period median dwelling values have grown at 5.6% per annum and household incomes have grown by 3.1% annually. The fact that household incomes have grown at a greater rate than costs for renters and home owners suggests that these people should in fact be in a relatively better financial position now than they were 13 years ago.
By individual property types over the last 13 years, the costs associated with owning a separate houses has increased by 3.3% annually ($72/week), semi-detached product has increased by $98/week or 4.0% annually and units have seen costs increase by $110/week or 4.6% annually. Again, the increase in household incomes has more than covered the costs across all property types.
The data also provided household estimates as at the end of the 2007-08 financial year. Nationally, 30% of properties are rented with 36% having a mortgage and 34% of these properties don't have a mortgage. Across individual states, renters are most prevalent in the Northern Territory (42.3%), owners with a mortgage are greatest in the ACT and owners without a mortgage are strongest in Victoria (36.7%).
So what does this mean? If you bought a property in 1994-95, the average cost of housing has increased by $112/week however, the household income has increased by $545/week (net position +$433/week) meanwhile, the value of your property has increased by $202,000 providing significant additional equity.
If you were renting, you have also seen your household income grow by $545/week, whilst housing costs for renters have increased by $68/week (net position +$477/week). In their pocket, renters enjoy much more money than those with a mortgage however, renters have missed out on the $202,000 increase in property values and the resulting equity position and potential to re-invest such growth in value affords.
It is perhaps a little surprising to see that there is not much difference in the proportion of income spent on housing costs for renters and those with a mortgage. However, it does suggest that those people renting tend to be on lower incomes. What is not surprising is how much equity home owners have built up in the last 13 years and the fact that the vast majority of Australian's still prefer to own their own home rather than rent with just 30% of households used for rental purposes. |
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Recycling company commits to Altona
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 Rapid expansion has prompted family-owned paper recycling company Think Recycling to lease new premises in Altona, Victoria.
Think has committed to lease a facility at Stockland's Altona Distribution Centre at 48-52 Slough Road, Altona.
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Read the full article.... |
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