The RP Data Market Activity Index has leveled after peaking three weeks ago. The flattening of the growth curve indicates real estate professionals may have now moved through the frantic start to the year.
Industry Market Wrap
The Reserve Bank this week laid the foundations for further interest rate rises. Assistant Governor Philip Lowe summed up the domestic economic conditions quite succinctly.
“Employment growth has been robust, business and consumer confidence is above average, the housing market has been strong, and there are signs that the period of business deleveraging is coming to an end. Collectively, these outcomes provide us with some confidence that the economy is now in a reasonably solid upswing.”
With capacity constraints in the domestic economy becoming more apparent, unemployment trending downwards and such buoyant economic conditions, the prospect of further interest rate rises is a virtual certainty. Financial markets are suggesting another 50 basis points will be added to the cash rate by September this year taking the average variable mortgage rate to around 7.4% which is about the same as the ten year average.
Advertised Stock on the Market
Newly advertised properties remain higher than normal. Rpdata.com monitored just under 51,700 new real estate listings entering the market over the last four weeks which is about 5% higher than the 12 month average. The total number of properties being advertised for sale is now just under 210,000 homes. Based on the average number of sales over the last six months, the Australian market currently has about 5 months of supply.
Want to know what is happening in your local patch? Make sure you have subscribed to RP Data's On the Market® service. Click here or phone 1300 734 318 for a free 2 week trial.
Latest National Auction Clearance Rates
There were 1,647 auctions held across the capitals last week with a 70 percent rate of clearance. Last week was the fourth week running where clearance rates were above 70%. Australia’s largest auction market, Melbourne, recorded a clearance rate of 84%.
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.
Number of Properties Advertised for Rent The number of rental properties being advertised increase slightly during the most recent week thanks to an increase in new listings. The number of relistings actually fell suggesting that rental properties available are being taken up. In each state except Queensland the total number of current rental listings is below the number recorded a month ago.
Population breaks the 22 million mark
Australia’s ongoing population boom is creating opportunities as well as challenges. During the September quarter Australia’s residential population broke the 22 million mark. Fuelled by one of the highest population growth rates in the Western world, the number of Australian permanent residents was estimated to be 22,065,671 persons; 451,876 more than at the same time last year.
Population growth is an important indicator for the property market. At the macro scale, population growth is a default measure of housing demand. Put simply, more residents equate to a larger requirement for housing. The ongoing high rate of population growth is half of the reason why Australia has an ongoing shortage of housing.
Instead of a blog entry as such this week we thought we’d provide a number of thematic maps highlighting the average income by postcodes in Australia’s capital cities. This data was released this week by the Australian Tax Office and is based on data for the 2007-08 financial year.
A retail shop in Malvern, Victoria, is the first commercial investment to be sold by newly-established agency, Gorman Commercial.
The fitness centre at 299 Wattletree Road, Malvern, was sold at auction on a yield of approximately 4.1%.
Gorman Commercial managing director, Stephen Gorman, described the sale of the property for $990,000 as a strong result.
The 176 sqm building on a 284 sqm site is presently leased until November 2016 at a rate of $40,623 per annum net, with a five-year option to renew.
“Melbourne’s inner suburban shopping strip properties are noted for their investment appeal and I was anticipating bids for 299 Wattletree Road, Malvern, would be based on a yield of around 4.5% to 5%, representing $820,000 to $900,000,” said Mr Gorman.
Special AREC 2010 ticket offer
to RP Data members
Save $340* with RP Data’s exclusive
client AREC10 ticket offer
As a valued RP Data client you can attend AREC10 at the group rate for an individual ticket. This event usually sells out so don’t delay!
2010 is the year to invest in YOU. Attend THE real estate professional development event of the year and pick up just one new idea that could change your business life forever. You are guaranteed to walk away with fresh ideas to energise your business as we move into the new decade.
Sydney – Sunday 16 to Monday 17 May (optional Leadership Day Tuesday 18 May)
Featuring Bob Geldof, Edward de Bono, Erik Wahl, Andrew Winter, Matthew Ferrara, Rick DeLuca, James Tostevin, Darren Saunderson, Jodie McCarthy, Aaron Shiner, John Percudani, Ewan Morton, John McGrath and many more exciting presenters.
How you can use the RP Data Property Pulse
As a participating RP Data subscriber, you are authorised by RP Data Limited to, at your choosing, forward this content to your customers or publish as editorial content on your website and newsletters in an unedited fashion provided that RP Data is appropriately quoted.
Conditions of Syndication
You should not rely upon the opinions expressed in this report for any investment decision. RP Data will not be held responsible for any loss or damage suffered as a result of relying upon the opinions and information contained in this report. You should always take specific advice from a professional advisor so that your particular circumstances can be assessed and an investment decision appropriate to your circumstances can be determined.
You may not under any circumstances take a whole or part of the content and forward to any media outlet at any time.
You may not re-publish this content as your own without our express written permission. All Intellectual property used in the creation of the RP Property Pulse remains with RP Data Limited. The research and opinions expressed remain those of RP Data Limited. If you have any questions about syndication obligations, please firstly speak with the RP Data Research Division on: 1300 734 318.
