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The property market remains relatively flat, but recent data show the number of new home sales is on the rise
THERE IS no doubt the property market has been uninspiring of late; however, there may be some light at the end of the tunnel.
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New data from the Housing Industry Association (HIA) show the number of new homes being sold is starting to edge higher, climbing 1.1 per cent in August following declines of eight per cent in July and 8.7 per cent in June.
HIA chief economist Harley Dale says problems abroad are preventing Australians from investing in property, both old and new.
That said, in the case of those who are financially able to build a new home, now is a very good time to contemplate doing so, Dr Dale says.
His assertion is supported by the data.
The latest statistics from RP Data show that 45.1 per cent of Australian dwellings are now worth at least double their original purchase price.
Australia’s residential housing market is now worth an estimated $4.56 trillion – almost four times the value of the Australian equities market – which makes it a very lucrative investment for those who can afford to enter the market.
“Strong value growth in property over recent years has been the catalyst for most regions enjoying quite strong levels of equity,” RP Data research director Tim Lawless says.
Over the five years to June 2011, capital city home values grew by approximately 30 per cent and provided a significant wealth boost to most home owners during this period.
According to RP Data’s Equity Analysis Report, only 3.7 per cent of Australian homes are currently valued at a lower amount than the price at which they were purchased. At the other end of the spectrum, about 45 per cent of Australian homes are worth more than twice what their owners originally bought them for.
Areas with the highest proportions of homes to have doubled in value are typically located in regional markets where values have moved from a low base and the housing market has seen long-term improvements in housing values.
“The Melbourne metro area is the exception,” he says. “It is the only capital city to fall within the top 10 list of regions enjoying the largest proportion of homes with more than 100 per cent equity accumulation.”
