Property steadies off peak

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This week the preliminary clearance rate across capital cities came in a little higher at 66.6%, compared with 65.5% last week. The clearance rate this time last year was 66%.

Weekly clearance rate, combined capital cities

Despite this medium term stability, the level of appreciation in 2013 is obvious when the current clearance rate is compared to the rates in the previous two years of 44.7% and 54.1%.

In Sydney this week, the preliminary clearance rate was 71.9% – which is up from 69.3% last week. The Sydney market has been most reflective of the stable national clearance rate – the rate has had little variance during the past three months, with a high of 76.1% and a low of 67.3%.

In Melbourne, the preliminary clearance rate was 69.1% compared to 69.2% last week. Melbourne’s performance last week was at the best it had been for three months, so it is a positive sign for the market that the numbers remain strong this week.

Capital city auction statistics (preliminary)

The median price for a Sydney house this week came in at $745,000 after 2,188 sales were made. In Melbourne, after 2,033 house sales were made, the median price came in at $510,000. Across the combined capital cities, after 6,875 sales were made, the median price for houses stood at $571,708.

Capital city private treaty median prices

The monthly home value changes for Sydney was up 0.5%, while Melbourne’s values decreased by 1.5% over the month. The annual home value change in Sydney has lifted by 15.9%, and 8.8% in Melbourne. Across the combined capital cities, the annual change came in at 10.2%.

Capital city home value changes

 

Some analysts are suggesting that further market gains from here are going to be hard won. According to RP Data research director Tim Lawless, the Australian property market is coming out of its peak growth phase after two years of very strong values. Six month annualised value growth figures peaked in November 2013 at 14.3%.

Lawless also analysed housing finance data released by the ABS which show that the value of investment finance commitments was at a record high – up 2.3% in April and 29.8% year on year. He has also noted that investment lending has outpaced growth in capital city home values.

Lawless says that as the proportion of lending to investors is at near to record highs, the banking sector regulators might start to become uncomfortable with housing market investment levels.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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