Property Pulse
20 November 09
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Weekly Property Pulse Professional Edition
20 November 2009 -
This week's edition covers... |
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RP Data’s weekly leading indicator of market activity eased slightly over the last week however, real estate market activity has remained extremely buoyant during spring and the index remains at higher levels than it has been during most of 2009. With the fall in the index recorded, this could signify the first signs of the impending Christmas/New Year period slowdown.
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The Reserve Bank of Australia released the minutes of their most recent board meeting this week which reveal some interesting insights into the lifting of the cash rate by 25 basis points earlier this month. The overall mood of the meeting was that the economy was in good shape and although the recovery is still fragile it is likely that the cash rate will continue to increase over time back to more normal levels. Although these increases are likely, it appears that the RBA will take a cautious approach. Thus, it would seem to suggest that the increases to interest rates may not occur in successive months (although most economists seem to think there’ll be another increase in December) and are likely to be in 25 basis point increments rather than the more aggressive 50 basis point increases.
Weekly Key Statistic - rents and yields
 Whilst rents have continued to increase in most areas during the last 12 months, the slowdown has clearly been felt in recent months with rates falling. Yields have generally fallen over the last 12 months and the decline has been greatest in recent months as rents have fallen and value growth has returned, eroding gross rental yields.
Latest National Auction Clearance Rates
 Last week was one of the auction markets busiest of the year with 1,672 auctions nationally. The weighted average auction clearance rate remained very healthy at 73.4% over the week. The largest auction markets recorded strong results with clearance rates of 70.8% in Sydney and 80.7% in Melbourne. It was the first time in three weeks Melbourne’s auction clearance rate had been above 80%.
Want to know the auction results for your local area? Login to
rpdata.com
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 increased slightly this week and sit slightly above 50,000, total listings also increased slightly. Compared to last year, new listings and total listings are well below currently indicating the good health of the property market. We still anticipate the slowdown is just around the corner as we creep ever closer to the Christmas / New Year period.
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Greatest annual rental growth
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Despite the fact that rental rates have eased nationally over recent months, certain suburbs in each state have witnessed exceptional increases in median rental rates during the last 12 months.
Over the 12 months to September 2009 weekly rents for houses nationally have increased by 3.4% and units have witnessed a slightly greater rate of growth at 4.1%. Compared to recent years, these results reflect a slower rate of growth. In most areas, rents have actually shown modest falls in recent months as value growth has returned to the market and rental growth has failed to keep pace. Also, first home buyer activity has eased some of the pressure on the rental market as renters became first home buyers.
With the First Home Buyers Grant Boost being wound back and mortgage rates rising it’s anticipated that more people will be forced to remain in the rental market. The impact is likely to be that rental rates will once again start to climb, especially given that nationwide our annual new dwelling requirement continues to go unfulfilled.
Across the housing market nationally, Rose Bay in Sydney’s Eastern Suburbs has witnessed the greatest annual growth in house rents at 58.3%. Over the 12 months, median weekly advertised rents increased from $600/week to $850/week.
The top five list sees a fairly even split between high and low priced suburbs making the list with many New South Wales, Victorian and Western Australian suburbs having higher price tags whilst other states recording a mixture of higher and lower priced stock.
A trend of note is that most of the best performing suburbs are situated within the capital city regions in fact, 29 of the 40 suburbs listed are within capital city markets. Those suburbs located outside of the capital city are generally situated in or close to larger regional markets, the exceptions are: Gunnedah in New South Wales and the Queensland mining and resource areas of Blackwater, Dysart and Moranbah.
Across the unit market, West End in Brisbane has seen the greatest jump in median weekly advertised rents, increasing by 39.4% from $330/week to $460/week.
The vast majority of suburbs with the greatest annual growth in rents for units, have witnessed this growth across lower priced stock with the only exception being Western Australia.
Similar to the results for houses, the vast majority of top performing suburbs for units were situated within capital city markets with 32 of the 40 suburbs listed located in these regions. Importantly, units are generally not as widely dispersed throughout the country and tend to only be available in capital cities, major regional markets, holiday coastal areas and some coastal towns.
There are many reasons why individual suburbs may see a large increase in median weekly advertised rents over a 12 month period. Some of these may include: a dramatic change in housing stock and quality, housing undersupply coupled with increasing demand or a shift from ownership to rentals. An example of improving housing quality is likely to have occurred in West End with new unit stock injected into the market, whilst increasing demand in mining and resource towns such as Dysart coupled with a housing undersupply is likely to have driven up rents in these areas.
Finally an area like Bronte has seen house prices fall 19% over the year however, it remains popular. It is likely that some residents have moved into the rental market rather than the housing market in order to enjoy the benefits of living in the suburb without having to service the mortgage. Also, some owners may have had to sell due to the economic downturn but still wish to remain in the suburb and renting is currently their best option.
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 A fully-leased office building in the Melbourne CBD has been sold via an off-market private tender by agents of Allard & Shelton.
The building at 446 Collins Street, Melbourne, is comprised of approximately 5543.5 sqm and according to Cityscope, its tenants include Jeffrey Thomas & Partners chartered accountants, Strategic Sports & Recreation, Melbourne International Fellowship and Bicycle Victoria.
It is understood that the property generates and annual rental income from its eleven storeys of offices and ground floor retail tenancies of $1.5 million.
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Read the full article.... |
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Blog: How to manage our population boom?
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Australia is going through a baby boom. Over the last year 293,600 babies were born in Australia; an absolute record number of new arrivals. At the same time, Australia is recording the highest level of overseas migration on record. The steep ‘natural increase” (ie births minus deaths) and the rate of overseas migration have combined to produce the record level of population growth we are currently experiencing – almost 440,000 new residents over the year to March.
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Read the full article at blog.rpdata.com |
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