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First home buyers may have gone off the boil but other segments are hotting up
The federal government’s boost to the first home owners grant has officially been wound back – and investors are preparing to flood the market.
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Figures from RP Data revealed a decline in property market activity following the removal of the boost, from a peak of 116 points down to around 110 points in less than two weeks.
But while many attribute the fall in activity to the winding back of the grant, RP Data’s head of property research Tim Lawless said it was more likely to be symptomatic of the seasonal influence of Spring – a traditionally strong period for property sales.
“The rapid acceleration of the Index reflected the Spring scramble as agents hurried to prepare properties for the Spring selling season. With the selling season now well underway agents are much more focused on selling rather than listing,” he says.
Mr Lawless says he does not expect the housing market to experience a further dramatic fall in activity, with investors gearing up to re-enter the market.
According to Aussie Home Loans founder and executive chairman John Symond, investors have been patiently waiting on the sidelines for the first home owners grant to taper off.
Aussie has recorded a 32 per cent rise in enquiries from investors via the Aussie website, and Mr Symond says increased consumer confidence, high rental yields and a continuous shortage of housing were combining to create “perfect conditions for property investors”.
A recent PRDnationwide survey of 764 investors found that almost 90 per cent intended to purchase property in the next two years, with 70 per cent looking to buy interstate and 66 per cent looking for long-term capital growth.
The majority of respondents said they would be looking at properties priced at between $300,000 and $450,000, with an annual rental return of between 4 to 5 per cent.
Prices and indicators
Latest figures
SYDNEY
Median house price: $594,704
Quarterly growth: 2.61%
Annual growth: 5.53%
Average annual growth: 2.42%
Median weekly rent: $502
Gross rental yield: 4.54%
Median unit price: $443,120
Quarterly growth: 0.78%
Annual growth: 6.12%
Average annual growth: 2.36%
Median weekly rent: $480
Gross rental yield: 5.71%
MELBOURNE
Median house price: $482,299
Quarterly growth: 3.66%
Annual growth: 6.71%
Average annual growth: 6.36%
Median weekly rent: $356
Gross rental yield: 4.05%
Median unit price: $381,967
Quarterly growth: 2.89%
Annual growth: 7.58%
Average annual growth: 4.89%
Median weekly rent: $333
Gross rental yield: 4.66%
BRISBANE
Median house price: $459,571
Quarterly growth: 1.20%
Annual growth: 1.83%
Average annual growth: 10.29%
Median weekly rent: $398
Gross rental yield: 4.56%
Median unit price: $349,666
Quarterly growth: 5.01%
Annual growth: 6.37%
Average annual growth: 10.57%
Median weekly rent: $343
Gross rental yield: 5.45%
ADELAIDE
Median house price: $418,555
Quarterly growth: 1.02%
Annual growth: 1.90%
Average annual growth: 7.27%
Median weekly rent: $342
Gross rental yield: 4.30%
Median unit price: $350,673
Quarterly growth: 0.61%
Annual growth: 3.96%
Average annual growth: 9.43%
Median weekly rent: $324
Gross rental yield: 4.88%
PERTH
Median house price: $487,822
Quarterly growth: 0.82%
Annual growth: -1.01%
Average annual growth: 10.90%
Median weekly rent: $400
Gross rental yield: 4.29%
Median unit price: $458,258
Quarterly growth: -0.92%
Annual growth: -3.08%
Average annual growth: 11.99%
Median weekly rent: $427
Gross rental yield: 4.85%
DARWIN
Median house price: $514,417
Quarterly growth: 3.82%
Annual growth: 17.71%
Average annual growth: 15.64%
Median weekly rent: $606
Gross rental yield: 6.38%
DARWIN
Median unit price: $367,030
Quarterly growth: 10.05%
Annual growth: 24.23%
Average annual growth: 13.12%
Median weekly rent: $427
Gross rental yield: 6.11%
CANBERRA
Median house price: $506,898
Quarterly growth: 3.85%
Annual growth: 7.11%
Average annual growth: 7.17%
Median weekly rent: $495
Gross rental yield: 5.18%
Median unit price: $389,119
Quarterly growth: 1.66%
Annual growth: 7.43%
Average annual growth: 8.47%
Median weekly rent: $412
Gross rental yield: 5.71%
Source: RP Data
Mortgage indicators
LENDING FOR HOUSING – SEASONALLY ADJUSTED
July 09: $16.884 billion
Change from June 09: Decreased by 1.7%
Change from July 08: Increased by 26.11%
AVERAGE NEW OWNER OCCUPIER HOME LOAN
July 09: $266,900
Change from June 09: Increased by 0.9%
Change from July 08: Increased by 6.9%
FIXED-RATE LOANS AS PERCENTAGE OF OWNER OCCUPIER LOANS
July 09: 7.2%
Change from June 09: Down 0.8%
Change from July 08: Down by 1.6%
FIRST HOME BUYERS AS PERCENTAGE OF OWNER OCCUPIER FINANCE COMMITMENTS
July 09: 25.7%
Change from June 09: Down by 1.4%
Change from July 08: Up by 7.1%
Source: ABS
Building approvals
TOTAL DWELLING UNITS APPROVED
August 09: 12,126
Change from July 09: Decreased by 0.1%
Change from August 08: 0.0%
TOTAL PRIVATE SECTOR HOUSES APPROVED
August 09: 8,880
Change from July 09: Increased by 3.1%
Change from August 08: Increased by 10.8%
TOTAL PRIVATE SECTOR OTHER DWELLINGS APPROVED
August 09: 2,625
Change from July 09: Decreased by 11.7%
Change from August 08: Decreased by 32.3%
Source: ABS
