The hous­ing run con­tin­ues

Port Douglas & Mossman Gazette - - REAL ESTATE -

AC­CORD­ING to the RP Data-Ris­mark Home Value In­dex, Aus­tralia posted a 1.2 per cent rise in cap­i­tal city dwelling val­ues over the month of Jan­uary with a 2.7 per cent rise for the three months to end of Jan­uary.

The lat­est In­dex re­sults re­vealed that cap­i­tal city dwelling val­ues in­creased by 13.2 per cent since the be­gin­ning of the cur­rent growth cy­cle back in June 2012 and are now 4.8 per cent higher than their pre­vi­ous peak in Oc­to­ber 2010.

RP Data re­search di­rec­tor Tim Law­less said cap­i­tal city hous­ing mar­kets con­tinue to be a mixed bag. ‘‘Syd­ney and Mel­bourne were the clear driv­ers for cap­i­tal gains over the past year, with val­ues up 13.4 per cent and 11.9 per cent re­spec­tively over the twelve months end­ing Jan­uary 2014.

Ex­clud­ing Perth, ev­ery other cap­i­tal city has recorded growth of less than 5 per cent over the past year.’’

He said these lat­est hous­ing mar­ket re­sults are likely to dampen fur­ther spec­u­la­tion around a cut to in­ter­est rates over the short to medium term.

‘‘To­gether with the higher than ex­pected in­fla­tion read­ing and a lower Aussie dol­lar, the sus­tained growth in dwelling val­ues is an­other fac­tor the RBA is likely to con­sider when de­lib­er­at­ing on any move­ment in the cash rate,’’ Mr Law­less said.

The re­sults con­firmed that Syd­ney and Mel­bourne are now well ad­vanced in their growth cy­cle.

Mr Law­less is ex­pect­ing the cur­rent ex­u­ber­ant con­di­tions to wind down over the com­ing year due to the very low yield en­vi­ron­ment, in­creas­ing af­ford­abil­ity con­straints and higher lev­els of hous­ing sup­ply im­pact­ing the mar­ket.

Mel­bourne, where val­ues were up 3.4 per cent over the three months end­ing Jan­uary 2014, con­tin­ues to of­fer an up­side sur­prise with strong cap­i­tal gains recorded de­spite the city show­ing the low­est rental yields of any other cap­i­tal and a lift in sup­ply across the in­ner city and outer fringe hous­ing mar­kets. Lo­cal dwelling val­ues also sur­passed their pre­vi­ous 2010 mar­ket peak and are now 2.6 per cent higher than the pre­vi­ous record highs.

Ris­mark’s CEO, Ben Sk­il­beck, says that ‘‘while a mod­er­a­tion in growth is ex­pected for Mel­bourne and, to a lesser ex­tent, Syd­ney, strong pop­u­la­tion growth, an in­creas­ing ap­petite for hous­ing credit and pos­i­tive con­sumer sen­ti­ment means we are un­likely to see price de­clines in the near term. Growth in out­stand­ing hous­ing bor­row­ings has in­creased mean­ing­fully from its lows.

‘‘Most no­tice­able is in­vestor bor­row­ing which for the cal­en­dar year 2013 grew by 7 per cent com­pared to 3 per cent in 2011.

‘‘While we are yet to ob­serve a sig­nif­i­cant in­crease in owner oc­cu­pier bor­row­ing, lend­ing com­mit­ments to this seg­ment for the month of Novem­ber, the lat­est avail­able, are 19% higher than the same time last year.’’

Mean­while, build­ing in­dus­try con­fi­dence has re­mained steady dur­ing the three months to De­cem­ber af­ter the strong im­prove­ment last quar­ter, ac­cord­ing to Master Builders lat­est Sur­vey of In­dus­try Con­di­tions for the De­cem­ber 2013 quar­ter.

Deputy ex­ec­u­tive di­rec­tor Paul Bid­well said that while trad­ing con­di­tions in the res­i­den­tial and com­mer­cial sec­tors are still far from pos­i­tive, the lat­est sur­vey re­sults re­flect a strong up­turn dur­ing the De­cem­ber quar­ter, par­tic­u­larly in the res­i­den­tial sec­tor.

‘‘Master Builders be­lieves the hold in con­fi­dence and up­turn in the res­i­den­tial sec­tor come on the back of strong build­ing ap­provals and hous­ing fi­nance data dur­ing Novem­ber and are fur­ther ev­i­dence that the re­cov­ery in hous­ing is un­der­way,’’ Mr Bid­well said.

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