Elite AgentINDUSTRY NEWSNEWS

Market Update 29 May 2014

The Australian Prudential Regulation Authority (APRA) released information earlier this week on the exposure of Australian Authorised Deposit-taking Institutions (ADIs) to property at the end of March 2013.

You can read a lot more about it on the RP Data Research Blog however, the key findings were:

  • $1.2 trillion worth of residential loans outstanding to Australian households
  • 35.4% of outstanding loans had an offset facility and 35.4% were interest-only mortgages
  • The average outstanding balance of these loans was $235,000, loans with an offset facility had an average balance of $281,400 and interest-only mortgages had an average of $297,200
  • Over the first quarter of 2014, 39.4% of new loans were interest-only loans.
  • 34.8% of new loans over the quarter had an LVR of more than 80% which is at its highest level since the December 2011 quarter.
  • Although lending at above 80% LVR is rising, the proportion of loans with an LVR of more than 90% was just 13.5% of all loans.

The Australian Bureau of Statistics (ABS) released data on construction work done over the March 2014 quarter earlier this week. Over the quarter, the value of total construction work done was $53.621 billion up 0.3% and 2.6% higher year on year. Of this work done, $31.854 billion or 59.4% was engineering construction, $13.055 billion or 24.3% was residential building and $8.712 or 16.2% was non- residential building. Over the quarter, engineering construction fell by -1.6%, residential building rose by 6.8% and non-residential building fell -1.5%. Year-on-year, engineering construction is 0.2% higher, residential building is 8.4% higher and non-residential building is 3.1% higher. The Reserve Bank has stated repeatedly that as mining investment (engineering construction) falls, they are hoping for a pick-up in residential building. This is occurring at the moment however, residential building still only accounts for 24.3% of work compared to engineering construction which is 59.4%. Depending on how big the fall is in engineering construction, the pick-up in residential building may not be enough to pick-up the slack.

Auction activity increased last week with 2,786 auctions across the combined capital cities, up from 2,194 the previous week. The weighted average capital city auction clearance rate was recorded at 67.1% last week which was up from 66.6% the previous week. Melbourne is the country’s largest auction market and the clearance rate was recorded at 66.6% which was down from 68.8% the previous week. Melbourne auction volumes were higher last week (1,211) than over the previous week (1,068). Across Sydney, 1,115 auctions were held and the clearance rate was recorded at 73.1% compared to 796 auctions and a 69.6% clearance rate over the previous week. Auction volumes are set to be higher over the current week, with 2,855 capital city auctions currently scheduled.

capital-city-auction-clearance-rates-may-25-2014

Over the four weeks to 25 May, there were 44,848 newly advertised properties listed for sale nationally. The number of newly advertised property listings increased by 0.4% over the week and they are currently 12.4% higher than at the same time last year. Across the combined capital cities, new listings were 1.8% higher over the week and 17.5% higher than a year ago.

There are currently 248,905 properties listed for sale across the country. Total listings at a national level were 0.5% higher over the week and are at a similar level to what they were at the same time last year. Across the combined capital cities, total listings have increased by 1.1% over the week however, they are -4.1% lower than they were at this time a year ago. Capital city listings account for just 42% of all listings nationally.

Number of homes for sale
Residential property listings advertised for sale over the four weeks ending 25/05/2014
Note that sales listings are based on a rolling monthly count of unique properties that have been advertised for sale.

State No of new listings 12 mth change (%) No of total listings 12 mth change (%) Capital city No of new listings 12 mth change (%) No of total listings 12 mth change (%)
NSW 13,304 29.7% 60,997 0.3% Sydney 8,209 37.5% 22,124 -5.8%
Vic 10,937 12.5% 59,053 -2.2% Melbourne 7,949 15.6% 31,867 -7.0%
Qld 10,026 -1.3% 65,690 -1.8% Brisbane 4,308 7.6% 19,212 -8.4%
SA 2,819 9.3% 16,257 -10.8% Adelaide 2,025 6.9% 7,739 -19.9%
WA 5,963 11.7% 32,377 15.4% Perth 4,401 12.5% 17,178 21.7%
Tas 922 4.1% 10,525 3.1% Hobart 391 3.7% 3,027 1.7%
NT 310 0.6% 1,540 8.8% Darwin 245 6.5% 1,142 18.1%
ACT 567 -14.7% 2,466 -14.5% Canberra 557 -12.1% 2,416 -12.3%
National 44,848 12.4% 248,905 0.0% Combined capitals 28,803 25.3% 104,705 -4.1%

Each week RP Data collects the most comprehensive set of auction results available in Australia. Thank you to our vast network of real estate professionals who assist us with aggregating these results. The statistics show how many auctions were reported by RP Data as well as the total number of auctions that were scheduled over the last week (due to the large number of auctions we are unable to report 100 percent of the results). ‘Sold‘ properties indicate those properties that were either successfully auctioned on the day, sold before the auction or sold after the auction. Properties ‘Not Sold’ were either passed in at auction or withdrawn. The ‘Market Activity Index’ monitors activity on the rpdata.com professional system including the volume of Comparative Market Analysis (CMA) reports being undertaken. On average, CMA volumes lead sales activity by about two months providing one of the most timely leading indicators available in the residential property market.

Show More

Tim Lawless

Tim Lawless is the Research Director at CoreLogic Asia Pacific. Tim has been in the Australian housing market industry for more than 20 years with a focus on research.