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ISCOVER
The RBA’s latest rate rise increases pressure on a slowing property market but it should not derail housing recovery
The Melbourne property market has grown at a rate of 20 per cent since 2007, according to RP Data research director Tim Lawless. Key drivers such as low interest rates, solid rental yields and first home buyer benefits have all contributed to the capital city’s stellar growth.
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Similarly, Perth continues to perform well with the median house price hitting $517,198 last month. There are indications that further price growth lies ahead for the Western Australia capital with Australian Property Monitors forecasting this figure to hit $1 million over the next decade.
According to RP Data’s Mr Lawless, Queensland and Western Australia are still very much driven by the resources sector. Meanwhile, South Australia has the lowest rate of unemployment plus a healthy level of infrastructure projects. All of those factors will contribute to solid growth over the next few years.
While the latest interest rate rise may well take some of the heat out of the property market across Australia’s capital cities, there is a danger that higher rates could deflate the building and construction industry.
The latest Performance Construction Index recorded a 4.1 point slump in building activity in March to 48.7 – slightly below the 50-point level that indicates expansion, according to the Australian Industry Group.
NSW Urban Taskforce director Aaron Gadiel says the latest rate rise will undermine the demand for housing and boost the holding costs faced by developers.
He says the rate rise will also make it more difficult for developers to demonstrate project viability.
Whether or not this trend will adversely impact the housing market remains to be seen.
Prices and indicators
Latest figures
SYDNEY
Median house price: $643,444
Quarterly growth: 3.93%
Annual growth: 12.04%
Average annual growth: 2.65%
Median weekly rent: $493
Gross rental yield: 3.98%
Median unit price: $484,252
Quarterly growth: 3.61%
Annual growth: 10.54%
Average annual growth: 3.18%
Median weekly rent: $461
Gross rental yield: 4.96%
MELBOURNE
Median house price: $544,554
Quarterly growth: 5.05%
Annual growth: 17.40%
Average annual growth: 7.18%
Median weekly rent: $365
Gross rental yield: 3.49%
Median unit price: $443,971
Quarterly growth: 6.46%
Annual growth: 18.33%
Average annual growth: 7.75%
Median weekly rent: $344
Gross rental yield: 4.03%
BRISBANE
Median house price: $476,693
Quarterly growth: 0.09%
Annual growth: 5.89%
Average annual growth: 8.77%
Median weekly rent: $378
Gross rental yield: 4.12%
Median unit price: $362,093
Quarterly growth: 2.16%
Annual growth: 8.69%
Average annual growth: 10.02%
Median weekly rent: $338
Gross rental yield: 4.85%
ADELAIDE
Median house price: $446,639
Quarterly growth: 2.69%
Annual growth: 8.71%
Average annual growth: 8.49%
Median weekly rent: $344
Gross rental yield: 4.00%
Median unit price: $371,930
Quarterly growth: 1.92%
Annual growth: 8.86%
Average annual growth: 10.98%
Median weekly rent: $317
Gross rental yield: 4.44%
PERTH
Median house price: $517,198
Quarterly growth: -0.17%
Annual growth: 6.80%
Average annual growth: 11.02%
Median weekly rent: $404
Gross rental yield: 4.06%
Median unit price: $489,465
Quarterly growth: -0.48%
Annual growth: 8.78%
Average annual growth: 12.54%
Median weekly rent: $412
Gross rental yield: 4.38%
DARWIN
Median house price: $550,831
Quarterly growth: 2.76%
Annual growth: 14.44%
Average annual growth: 14.98%
Median weekly rent: $536
Gross rental yield: 5.06%
Median unit price: $429,547
Quarterly growth: 8.37%
Annual growth: 28.15%
Average annual growth: 17.29%
Median weekly rent: $487
Gross rental yield: 5.89%
CANBERRA
Median house price: $550,245
Quarterly growth: 3.52%
Annual growth: 13.89%
Average annual growth: 7.73%
Median weekly rent: $485
Gross rental yield: 4.58%
Median unit price: $414,404
Quarterly growth: -0.61%
Annual growth: 12.91%
Average annual growth: 7.09%
Median weekly rent: $385
Gross rental yield: 4.83%
Source: RP Data
Mortgage indicators
LENDING FOR HOUSING – SEASONALLY ADJUSTED
February 10: $14.085 billion
Change from January 10: Decreased by 4.4%
Change from February 09: Decreased by 9.6%
AVERAGE NEW OWNER OCCUPIER HOME LOAN
February 10: $274,400
Change from January 10: Decreased by 3.1%
Change from February 09: Increased by 0.1%
FIXED-RATE LOANS AS PERCENTAGE OF OWNER OCCUPIER LOANS
February 10: 2.1%
Change from January 10: Down by 0.4%
Change from February 09: Down by 0.7%
FIRST HOME BUYERS AS PERCENTAGE OF OWNER OCCUPIER FINANCE COMMITMENTS
February 10: 18.1%
Change from January 10: Down by 2.4%
Change from February 09: Down by 8.7%
Source: ABS
Building Approvals
TOTAL DWELLING UNITS APPROVED
February 10: 13,929
Change from January 10: Decreased by 3.3%
Change from February 09: Increased by 34.2%
TOTAL PRIVATE SECTOR HOUSES APPROVED
February 10: 9,711
Change from January 10: Decreased by 0.9%
Change from February 09: Increased by 33.3%
TOTAL PRIVATE SECTOR OTHER DWELLINGS APPROVED
February 10: 2,698
Change from January 10: Decreased by 10.9%
Change from February 09: Decreased by 4.9%
Source: ABS
