Pre-listing activity has seen a sharp increase over the most recent week after easing during the two previous weeks. The results are a little unexpected given the softening market conditions and it will be important to watch the volume of new listings over coming weeks to see if the rebound in pre-listing activity translates into a significant increase in the amount of housing stock being advertised for sale.
Industry Market Wrap
The RP Data-Rismark Home Value Index results released this week showed soft results for capital gains during May with capital city property values increasing by 0.6% during the month. These results were slightly stronger than the 0.2% growth recorded in April however, the results still indicate that the market is transitioning to a period of lower, more sustainable value growth. Whilst the capital city results showed that values were still increasing, albeit at a much more subdued rate, house values outside of the capital cities fell by -0.9% over the month indicating that there is a significantly different performance in the property market once you move outside of the capital city markets. The results were to be expected with the lead indicators such as auction clearance rates, consumer confidence and housing finance data all softening during recent months. Despite these weaker lead indicators, total property listings, the average time on market and the level of vendor discounting have recorded no significant change in recent months, allaying fears of significant value falls.
The Housing Industry Association (HIA) released their New Home Sales Series this week which is based on a survey of Australia’s top 100 builders. The results highlighted that total seasonally adjusted new home sales fell by 6.4% in May 2010. The report states,
“There is no sustained upward momentum in new home sales in 2010 because higher interest rates and concerns over the threat of further rate hikes are dampening demand. Meanwhile, supply side obstacles, including a lack of affordable land and tight credit availability for residential development, are weighing down considerably on the new home building sector.”
Advertised Stock on the Market The volume of newly advertised property entering the market over the last week rose sharply by 11.6% following two public holiday affected weeks. The total volume of new listings also recorded an increase of 4.5% last week.
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Latest National Auction Clearance Rates Auction clearance rates continue to trend lower with the national weighted average clearance rate recorded at 57.3% last week. Despite the fact that clearance rates continue to trend down, auction volumes remain high with around 2,000 capital city auctions taking place last week. Melbourne’s auction clearance rate fell again last week to 61.2%. After recording its lowest clearance rate of the year during the previous week, Sydney’s auction clearance rates increased to 62.9% last week.
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Number of Properties Advertised for Rent Rental listings reversed their trend of the last two weeks with sharp increases in both new and total rental listings. Despite the increase, both new and total rental listings sit below their levels of a month ago.
When is the best time to sell a property?
Every year the residential market gears up for the Spring Selling Season, this week we take a look at whether or not spring is worth the hype.
Every year we hear all the hype and excitement around the ‘Spring Selling Season’ as September comes closer however, the cold hard facts are that the spring season doesn’t see the greatest level of sales activity although it does record the greatest number of listings.
An analysis taken across sales volumes between January 2000 and December 2009 has found that on a national basis, it is actually March that is the busiest month for house and unit sales. On average over the last 10 years March has accounted for about 9.3% of all dwelling transactions on a national basis. The results have shown that despite the fact that March is the busiest month for sales there is little fluctuation in sales activity except within December and January when sales volumes fall away markedly. Clearly once everything starts to settle down after the Christmas / new year period, attention turns back to the property market resulting in strong sales volumes during March.
Agents of Kliger Wood Real Estate have sold via tender a fully leased office, warehouse and laboratory property in Fitzroy, Victoria.
The property at 60-70 Hanover Street, Fitzroy, was purchased by a Melbourne private investor with a view to redevelopment on expiry of the current tenancies.
Kliger Wood selling agent, Lou Montalti, marketed the property, which achieved a final sale price of $7.25 million.
The building is presently leased to Genetype, a pathology and medical services business, until July 2011 at a current annual rental of approximately $405,000, giving the sale a yield of approximately 5.59%.
According to Mr Monalti, Genetype intends to relocate from the building following the conclusion of the lease.
The 2408 sqm island site has street frontages of 47 metres to Hanover Street, 55 metres to Fitzroy Street, 35 metres to Brunswick Place and 39 metres to Brunswick Lane.
The refurbished two-storey building of 2600 sqm also has on site car parking for forty six cars.
“We received a strong tender response as island sites of this size within close proximity to the CBD are rarely on offer,” said Mr Monalti.
“The site is zoned predominantly Business 1 and part Residential 1 and alternative uses such as a multi level residential development could be formulated with the acquisition of appropriate permits.”
“From a developers perspective there is the significant rental income stream while future plans are formulated.”
“We were anticipating that tender offers would be in the region of $6.5 million so this is a strong result for a unique property.”
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Blog: Development finance may be starting to flow more freely
Business lending has moved back into the black during May, with business credit growing by 0.4 per cent based on the latest stats issued by the Reserve Bank (see here for details of their release). Lending to businesses started to show some tentative growth in February this year after consistent month on month declines that commenced back in November 2007.
The annual trend is clearly improving, suggesting that the banks may finally be loosening the purse strings on business related finance. The 0.4 per cent gain in May is still half of the five year average (0.8 per cent growth month on month) but the improvement is probably a sign that the finance sector is becoming less risk averse.
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The property at 60-70 Hanover Street, Fitzroy, was purchased by a Melbourne private investor with a view to redevelopment on expiry of the current tenancies. 
