RP Data’s measure of pre-listings activity, the Market Activity Index, nudged slightly higher this week. Despite this increase we may still start to see a slowdown in real estate listing activity in the coming weeks and months as the sceptre of higher interest rates lingers. Over the early part of 2010, pre-listing activity has been at record high levels but in recent weeks we have seen pre-listing activity fall to lower levels with interest rate increases likely to dampen the prospects of activity returning to those historic high levels.
Industry Market Wrap
Last week Westpac and the Melbourne Institute released their Consumer Sentiment Index. On a seasonally adjusted basis it showed that consumer sentiment fell from 117.3 points in March to 116.1 points in April 2010. Despite the fact that interest rates have now increased by 125 basis points since October 2009, consumer sentiment remains remarkably resilient. Historically, as interest rates increase sentiment falls, if interest rates continue to increase in the coming months we anticipate that this will start to have a dampening effect of consumer sentiment. A subset of the Consumer Sentiment Index is the Time to Buy a Dwelling Index, this Index has eased significantly during the last three months. At its recent peak the Index was recorded at 146.3 points, today it sits at 104.3 points. The result indicates that many believe the best time to buy a dwelling has now passed. This is no real surprise given recent strong growth in property values coupled with interest rate rises which have made it more expensive to purchase and subsequently service housing debt.
Advertised Stock on the Market
Almost 53,000 newly advertised properties were listed for sale during the last four weeks which was an increase from the previous week’s results. Total listings have also increased during the last four weeks however, they remain well below the result from two weeks previous when there was more than 214,000 listings nationally.
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
Auction clearance rates were once again strong this week, and recorded an increase in the proportion of cleared auctions compared to the previous week. The weighted average clearance rate across the capital cities last week was 75%. The nation's two largest auction markets recorded healthy clearance rates of 84% in Melbourne and 71% in Sydney whilst both cities had a greater number of auctions than during the previous week.
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 new rental listings fell over the most recent week however, volumes are above the level of a month ago. SA, Tas, NT and ACT all recorded a lower volume of new rental listings during the most recent month than they did over the previous month. Total rental listings are now 6% lower than they were during the previous month and 4% lower than last week.
What's really happening with rents and yields
In this week’s Property Pulse we take a look at what rents and yields are doing on a national basis and what it means for renters and investors.
Between August 2005 and February 2010 national capital city rental rates have increased by a total of $133/week for houses and by $132/week for units. Over the last 12 months weekly rental growth has been much more subdued with house rents remaining virtually unchanged and unit rents increasing by $10/week. Much of the rental growth recorded over the last year has come in recent months after rental rates recorded minor falls mid way through 2009. National capital city rental rates are currently recorded at $440/week for houses and $417/week for units.
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A warehouse property in Richmond, Victoria, has been sold at auction by agents of Fitzroys to an owner occupier.
The property at 77 Murphy Street, Richmond, is understood to have received more than 70 enquiries over its marketing campaign.
Fitzroys agent, Charles Emmett, marketed the property, which sold at auction to a domestic building company for $1.12 million.
The 320 sqm Industrial 1 site achieved a value of $3500/sqm from the sale.
“There is an enormous level of demand for industrial properties of this size and within close proximity to the CBD,” said Mr Emmett.
“The auction was attended by a large crowd of about sixty people with the bidding well contested by a number of parties.”
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Blog: Too many overseas buyers?
How many foreign buyers are there in the Australian residential market?
Well the simple answer is: no one knows.
The issue of foreign investment in Australian residential property markets has been thrust into the spotlight over recent months with speculation mounting that foreign buyers are distorting Australian home values due to the their demand and spending power.
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