The real estate market has shown a stronger than expected start to 2010 with the level of professional activity ramping up rapidly. The amount of Comparative Market Analysis (CMA) reports being generated on the RP Data platform have been spiking over the last few weeks with the number of CMA reports higher than at any time last year. CMA activity provides one of the best lead indicators of future listing volumes; based on the current level of activity from industry professionals we anticipate a large number of new property listings to hit the market over the coming month.
National Home Value Index Release RP Data - Rismark International
Australia’s residential property market takes a breather in December
After recording a stellar performance over most of 2009 the Australian residential property market ended 2009 on a softer note with national home values virtually flat during the month of December.
Australian home values recorded a -0.3 per cent fall in the month of December as the seasonal effect of the summer slowdown combined with rising interest rates and fading first time buyers put a dampener on what has otherwise been a very strong year for Australian residential real estate.
With CPI figures released this week talk has once again turned to interest rates. The broad expectation is another 25 basis point rise in the official cash rate on Tuesday. A cash rate of 4.0 percent will translate to an average variable mortgage rate around 6.9 percent and the expectation is that mortgage rates could be approaching 8 percent by years end. Inflation was up by 0.5 percent last quarter, however excluding volatile items like fruit, vegetables and fuel from the calculation shows that inflation is considerably higher than what the headline figures show.
We are focusing on the inflation figures as our weekly key statistic. The graph shows annual movement in the consumer price index over time, with the yellow band representing the Reserve Bank’s target zone of 2-3 percent. The Reserve Bank prefers to use a weighted median or a trimmed mean for their measure of inflation which places the measure around 3.4 percent which is well outside of their comfort range. With inflation remaining this high, the Reserve Bank is under mounting pressure to curb demand through another interest rate hike.
Auction markets are starting to become more active also with 105 auctions held over the last week. The weighted clearance rate across the combined markets was 64 percent, with the largest auction market (Melbourne) recording a clearance rate close to 80 percent across 27 reported auctions.
Want to know the auction results for your local area? Log into rpdata.com and go the Auction Results panel on the top right corner of the home page.
The amount of new listings coming onto the market nationally are higher than at the same time last year, particularly in Queensland and Western Australia where new listings are up 12 percent and 8 percent higher respectively compared with last year. New listings in Victoria are slightly lower than the same time last year – the only state to record a marked fall in listings.
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Units show higher rate of turnover than houses
Most home owners tend to ‘hold’ their property for at least five years, but in many suburbs and regions around Australia the hold periods are much shorter.
A suburb’s hold period is the average time period between when a property is purchased and when it is re-sold. Across Australia’s capital cities, the average ‘hold period’ for houses ranges from just 4.5 years in Darwin up to 9.3 years in Melbourne.
Units are typically held for a shorter period of time, ranging between 4 years in Darwin and 8 years in Melbourne.
Blog: Market Activity Increasing rapidly post Christmas / New Year
The New Year is certainly starting with bang. Anecdotally we are hearing that many real estate agents have cut their holidays short due to unexpectedly high prospective vendor enquiries. Also, pre-listings activity from real estate professionals is already higher than at any time over the last two years suggesting that the amount of stock about to come on the market is going to start ramping up over the coming month.
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