September Property Report

With winter now over the weather heat up but will the property market remain hot?

Residential property in Australia is the nation’s single largest and most valuable asset class with a total estimated value of $5.5 trillion as at August 2014. Which is significantly larger than the value of listed equities ($1.6 trillion), Australian superannuation ($1.8 trillion) and commercial real estate ($0.7 trillion). Over the 12 months to March 2014, Australian gross domestic product (GDP) was recorded at $1.56 trillion indicating that the value of residential property is around three and a half times larger than the annual output of the Australian economy.

Home values increased by 1.1% across the combined capital cities in August and had the strongest winter growth since 2007 rising by 4.2% over the three months.  Perth’s median values are currently $530,000 for houses and $440,000 for units. Both are lower than the national median of $548,000 and $467,500 respectively.

Dwelling sales across the country increased by 10.8% in the year to June 2014. Tasmania had a 21.3% change in sales, the highest of all the states and territories. Only Western Australia and the Northern Territory had a decrease in the number of sales recording -1.3% and -0.2% respectively.

Over the 12 months to July 2014, the most affordable 25% of capital city suburbs recorded the lowest rate of value growth (7.9%) while the most expensive 25% recorded the fastest rate (10.9%).  The middle 50% had growth of 10.2%. The past three months tell a similar story. The most affordable suburbs have recorded value increases of 0.2%, followed by the middle market where values have risen by 0.9% and the most expensive suburbs were decidedly stronger with values increasing by 1.5%.

Due to increasing property prices the number of affordable dwellings has decreased. Just 24.2% of all houses and 37.3% of all units sold across a capital city over the year had a selling price of less than $400,000. As a result, over the past year to July, the increase in unit approvals has been greater than the increase in house approvals in Sydney, Brisbane, Adelaide and Perth as they are a cheaper entry point into the market. All individual capital cities except for Adelaide (31.1%), Perth (25.0%) and Hobart (9.0%) are seeing a majority of approvals for units. Perth (26.6%) was only behind Brisbane (44.5%) and Sydney (29%, 68.3% of which were for units) for the greatest increase in dwelling approvals over the 12 months. Sydney together with Melbourne accounted for more than 57% of all dwelling approvals in the year to July.

Winter is traditionally a slower period for property sales. Poor weather and the footy usually results in people staying indoors rather than doing inspections. Now that we have entered Spring there could some more activity.

To speak with a one of our expert brokers please do not hesitate to call us on 08 9242 3300 or email info@nullrdfinance.com.au.

Source: RP Data