RP Data November housing market update

By Leith van Onselen

Please find above RP Data’s November housing market update, which analyses the nation’s housing market as at the end of October when dwelling values declined by -1.0% over the month.

As always, there are some interesting tidbits of information, including:

1. The recent pick-up in sales volumes, which are tracking 15% the same time last year, although they remained 4.2% below the five year average in August:

2. The average time taken to sell a home has also declined from the same time last year – from 62 days in September 2012 to 56 days in September 2012 – although it remains fairly elevated:

3. The average level of vendor discounting has fallen by -0.5% from the same time last year:

4. Auction clearance rates are improving, but remain fairly low compared with the ‘boom’ times of 2009-10:

5. The overall number of homes listed for sale was -0.7% below last year’s levels in October 2012, but remains highly elevated:

Looking forward, RP Data’s Tim Lawless expects the housing market to stage a tepid recovery, although conditions will continue to favour the buyer. Lawless notes that Perth, Sydney and Brisbane are expected to perform the best over the coming year, although growth rates will only track income growth “at best”.

Twitter: Leith van Onselen. Leith is the Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. Click for a free 21 day trial.

Leith van Onselen
Latest posts by Leith van Onselen (see all)

Comments

  1. I guess with the EU now on a fast track down to crash land and the US on the end of a cliff the wise people who stood on the side lines waiting for the Australian property market to slide may have made the right choice.

    For the life of me I can’t see how the market can stand up with a global crash on its way

      • I can well understand the frustration of people who have been waiting for realistically affordable housing and can only thank my lucky stars that I wasn’t born 5-6 years later. Otherwise I’d be either waiting myself, or up to the neck in debt.

        • And that is why the market won’t crash, there are too many cashed up people waiting in the wings and ready to step in when there is a dip, thus supporting the price.

          The only way I see the property market falling is when rates rise about what the already geared people are able to pay.

          • “””And that is why the market won’t crash, there are too many cashed up people waiting in the wings and ready to step in when there is a dip, thus supporting the price”””……………………………………………………..

            The logic of an idiot!!!

            I have alot of savings and have waited a long time for the prices to correct, when I see them heading south it does not mean I am going to jump in an buy until I see it at fair value (makes sense to buy not rent). Your logic states that people who have held off this long due to sky-high prices will prop up the market by jumping on at the slightest sign of a fall???

            I know I am prepared to wait longer if need be, I wont be one of pillars of support for prices thats for sure.

          • but if there is a dip many people will be waiting for the prices to drop even further with the attitude: “why buy now if you can buy it cheaper next year”

          • Have to agree. Those who have the patience and fortitude to wait this long are likely to also have the brains to sit tight till a bottom has obviously been hit. I would guess that is around 6 months of consistent solid price gains. Sure, you might give up 5% of capital gains, but you also avoid the risk of losing much more. It’s a pretty simple decision.

          • “And that is why the market won’t crash, there are too many cashed up people waiting in the wings and ready to step in when there is a dip, thus supporting the price.”

            Amazing that these people didn’t exist in other countries that have had crashes. We really are different.

  2. TheRedEconomistMEMBER

    The Slow melt continues in Sydney.

    Any price growth recorded over the last 12 months has been eaten up by inflation.

    The results show that the ceasing of the First home buyers grant on existing property did bring forward alot of transactions which caused some Price rises over the months of July, August, September.

    But as soon as the grant stopped on October 1, prices have fallen.

    Not even 150 basis point drop in interest rates is is assisting here… and if the RBA drop in December… it will be done to help retail sales in the lead up to Xmas.

    May the slow melt continue..
    Rent

    • Any price growth recorded over the last 12 months has been eaten up by inflation.
      What exactly does that mean and how does it help me afford a house?

      • Simplistically, it doesn’t help unless you can save at say 500,000 (price) x 2.5% (inflation) or more on top of the rent you paid (if any). If you can’t save faster than nominal price goes up then you borrow more and pay more interest, particularly if you also have to borrow over a longer time.

        It’s a complicated situation and analysis for everyone when different markets are behaving differently and there is nominal growth but real decline.

        Fear and greed, anxiety and optimism!

        No one knows how successful the RBA and state government incentives for FHB of newly constructed properties will be and how much will benefit buyers and how much will go to higher prices for developers and what negative flow ons there might be to prices of established housing as FHB demand goes to newly constructed housing instead.

        • you’re income should also rise at least inline with inflation (on average anyway), so your ability to repay the loan is essentially neutral

          but inflation also helps the person who has a loa already (ie, those who didn’t wait), as their ability to repay their loan is also increasing.

          So, I guess it’s just about neutral either way in Sydney, although my guess is there’s more downside risk to housing (for those who bought) than there is upside risk (for those who are waiting)

  3. Sorry if this has been posted already, but Ben Rabidoux has put out a 3 part report on Canadian housing at his blog,

    http://theeconomicanalyst.com/

    The third part ends with “Insights into Canadian bank censorship” suggesting negative reports are pulled and altered at the behest upper management and pressure from CMHC executives.

    Can’t imagine it’s much different here.

    • +1 agree, but in fact Australia media has neither diversity nor independence
      Met Australian visitor recently spoke about how Oz media obsesses about 1. Foreigners, immigration, refugees, population, Aboriginals etc. 2. ARL/NRL 3. Property. A European resident in Melbourne learnt that if you want WWIII to break out at a dinner party just mention 1. Football (or soccer to readers of The Age) has legs vs ARL/NRL 2. Aborigines, refugees etc. deserve some respect 3. Property is way over valued, plus can and should drop……

      • I know. Tried telling baby boomer in laws with rudimentary understanding of macro events that we should wait bit longer before buying in cases prices head south. Should have heard response something akin to “doesnt matter what price you buy at in ten years time it wont matter as prices always goes up”. Problem is they bought a portfolio of >5 properties more than 5 years ago and have done well out of them but fail to understand that those conditions wont be replicated anytime soon.

  4. My local house porn The Melbourne Weekly brims with glossy RE pics shot at sunset with all the lights on. It feels like half leafy inner east Melbourne is for sale.

    Keep them.

    Prices here are 80/20 land/building. The correction is entirely on land values.

    It’s just a bloody house, y’know.

    Don’t Buy Now!

  5. reusachtigeMEMBER

    Is this the best property can do now that we at emergency interest rates? The buyers strike goes on …