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Property values continue to show strong growth on the back of ongoing undersupply and buyer demand
In December 2009, the total value of housing finance commitments (excluding alterations and additions) dropped by a marginal 2.8 per cent from November, in seasonally adjusted terms.
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Meanwhile, the number of first home buyer commitments also decreased across Australia from 22.1 per cent in November 2009 to 21.0 per cent in December.
A slower end to 2009 has been compounded by falling January housing finance approvals, which dropped 7 per cent, according to a Westpac economic report – well below the bank’s expectations of a 1 per cent gain for that month.
The bank’s senior economist, Matthew Hassan, said the removal of additional incentives for first home buyers and higher interest rates drove the significant pull-back in housing finance approvals.
Affordability will remain an issue in the wake of the RBA’s decision to increase the cash rate by 0.25 per cent in March – the fourth rise in five months, after a brief hiatus in February.
Higher rates will increase financial pressure on Australian families, according to Real Estate Institute of Australia president David Airey.
Mr Airey has warned that Australia is still in uncertain times and the latest rate increase will hit borrowers hard.
Despite the rise in interest rates, house values continue to climb with Sydney, Canberra and Darwin posting the highest median house prices at $626,555, $546,489 and $538,857 respectively.
Despite a recent drop in first home buyer activity, the market for investors, upsizers and downgraders should represent opportunities for brokers in the period ahead.
Prices and indicators
Latest figures
SYDNEY
Median house price: $626,555
Quarterly growth: 2.32%
Annual growth: 11.33%
Average annual growth: 2.53%
Median weekly rent: $550
Gross rental yield: 4.56%
Median unit price: $464,276
Quarterly growth: 0.35%
Annual growth: 7.59%
Average annual growth: 3.19%
Median weekly rent: $469
Gross rental yield: 5.26%
MELBOURNE
Median house price: $531,187
Quarterly growth: 4.21%
Annual growth: 16.16%
Average annual growth: 7.19%
Median weekly rent: $461
Gross rental yield: 4.51%
Median unit price: $426,044
Quarterly growth: 4.58%
Annual growth: 16.35%
Average annual growth: 7.11%
Median weekly rent: $367
Gross rental yield: 4.48%
BRISBANE
Median house price: $488,301
Quarterly growth: 2.51%
Annual growth: 8.83%
Average annual growth: 9.44%
Median weekly rent: $391
Gross rental yield: 4.16%
Median unit price: $348,440
Quarterly growth: -1.87%
Annual growth: 4.30%
Average annual growth: 9.05%
Median weekly rent: $350
Gross rental yield: 5.23%
ADELAIDE
Median house price: $445,243
Quarterly growth: 3.37%
Annual growth: 8.23%
Average annual growth: 8.46%
Median weekly rent: $337
Gross rental yield: 3.94%
Median unit price: $369,974
Quarterly growth: 2.43%
Annual growth: 6.81%
Average annual growth: 11.43%
Median weekly rent: $334
Gross rental yield: 4.69%
PERTH
Median house price: $517,554
Quarterly growth: 0.23%
Annual growth: 7.08%
Average annual growth: 10.97%
Median weekly rent: $391
Gross rental yield: 3.93%
Median unit price: $474,100
Quarterly growth: -3.95%
Annual growth: 6.15%
Average annual growth: 12.17%
Median weekly rent: $397
Gross rental yield: 4.35%
DARWIN
Median house price: $538,857
Quarterly growth: 3.80%
Annual growth: 12.45%
Average annual growth: 14.35%
Median weekly rent: $568
Gross rental yield: 5.48%
Median unit price: $412,484
Quarterly growth: 6.74%
Annual growth: 20.32%
Average annual growth: 17.19%
Median weekly rent: $437
Gross rental yield: 5.51%
CANBERRA
Median house price: $546,489
Quarterly growth: 4.59%
Annual growth: 12.71%
Average annual growth: 7.05%
Median weekly rent: $504
Gross rental yield: 4.79%
Median unit price: $435,385
Quarterly growth: 3.12%
Annual growth: 17.68%
Average annual growth: 8.14%
Median weekly rent: $404
Gross rental yield: 4.82%
Source: RP Data
Mortgage indicators
LENDING FOR HOUSING – SEASONALLY ADJUSTED
January 10: $14.737 billion
Change from December 09: Decreased by 5.0%
Change from January 09: Decreased by 0.5%
AVERAGE NEW OWNER OCCUPIER HOME LOAN
January 10: $282,800
Change from December 09: Decreased by 0.1%
Change from January 09: Increased by 0.1%
FIXED-RATE LOANS AS PERCENTAGE OF OWNER OCCUPIER LOANS
January 10: 2.5%
Change from December 09: Down by 0.5%
Change from January 09: Down by 1.2%
FIRST HOME BUYERS AS PERCENTAGE OF OWNER OCCUPIER FINANCE COMMITMENTS
January 10: 20.5%
Change from December 09: Down by 0.5%
Change from January 09: Down by 5.5%
Source: ABS
Building Approvals
TOTAL DWELLING UNITS APPROVED
January 10: 14,045
Change from December 09: Decreased by 7.0%
Change from January 09: Increased by 47.6%
TOTAL PRIVATE SECTOR HOUSES APPROVED
January 09: 9,630
Change from December 09: Increased by 0.3%
Change from January 09: Increased by 36.4%
TOTAL PRIVATE SECTOR OTHER DWELLINGS APPROVED
January 10: 2,880
Change from December 09: Decreased by 29.1%
Change from January 09: Increased by 28.8%
Source: ABS
