Strong demand from first home buyers is continuing to sustain the residential property market, with first home buyers now expected to drive a recovery across the wider market into 2010.
Monthly housing finance activity reached over $21 billion in April according to ABS figures, up more than 10 per cent since April 2008. The jump reflects strong first home buyer activity, which has risen to 28 per cent of all owner-occupied loans.
BIS Shrapnel’s latest Residential Property Prospects report said conditions were ripe for a sustained recovery in the broader residential property market by the end of 2009, as many mid-market owners looked to upgrade.
“By the end of 2009, strong turnover of the most affordable properties will be flowing through into the bulk of households positioned towards the middle of the market, as people who have sold their existing dwellings to first home buyers upgrade to their next home,” BIS Shrapnel senior project manager Angie Zigomanis said.
BIS Shrapnel expects house prices to rise by between 15 and 19 per cent in most capital city markets by 2012 while prices in Darwin and Perth are expected to perform slightly lower at 11 and 12 per cent.
A look at the latest quarterly growth figures from RP Data shows most capital cities are now enjoying positive growth – in stark contrast to international markets, which are continuing to slump. Only Perth prices are continuing on a downward trend while unit values in Brisbane and houses in Darwin have dipped slightly.
And with the overall outlook for the market increasingly bright, the industry is anticipating the investor segment will start to pick up towards the end of the year.
“We expect rising confidence in the prospects for an economic recovery in 2010, so investors are likely to return in greater numbers, attracted by increased rental returns and low interest rates,” BIS Shrapnel’s Mr Zigomanis said.
The Mortgage Choice Property Investors Survey 2009 recently revealed that three in four Australians who plan to buy an investment property were waiting until the first home owner grant boost ends on 31 December 2009.
However investor activity has already started to inch upwards, according to AFG’s Mortgage Index, with investor loans as a proportion of all monthly deals rising to 28 per cent in May, up from 24.5 per cent in March.
PRICES AND INDICATORS
Latest figures
SYDNEY
Median house price: $574,713
Quarterly growth: 3.70%
Annual growth: 0.72%
Average annual growth: 2.56%
Median weekly rent: $502
Gross rental yield: 4.54%
Median unit price: $437,389
Quarterly growth: 2.84%
Annual growth: 4.78%
Average annual growth: 2.75%
Median weekly rent: $480
Gross rental yield: 5.71%
MELBOURNE
Median house price: $462,457
Quarterly growth: 4.0%
Annual growth: 1.03%
Average annual growth: 5.83%
Median weekly rent: $356
Gross rental yield: 4.0%
Median unit price: $368,865
Quarterly growth: 4.07%
Annual growth: 2.98%
Average annual growth: 5.57%
Median weekly rent: $333
Gross rental yield: 4.69%
BRISBANE
Median house price: $452,873
Quarterly growth: 2.57%
Annual growth: -2.98%
Average annual growth: 10.42%
Median weekly rent: $398
Gross rental yield: 4.57%
Median unit price: $328,460
Quarterly growth: -0.88%
Annual growth: -3.49%
Average annual growth: 9.61%
Median weekly rent: $343
Gross rental yield: 5.43%
ADELAIDE
Median house price: $413,084
Quarterly growth: 1.58%
Annual growth: -1.74%
Average annual growth: 7.87%
Median weekly rent: $345
Gross rental yield: 4.34%
Median unit price: $346,245
Quarterly growth: 1.70%
Annual growth: 0.67%
Average annual growth: 10.35%
Median weekly rent: $325
Gross rental yield: 4.89%
PERTH
Median house price: $473,042
Quarterly growth: -1.20%
Annual growth: -5.55%
Average annual growth: 10.60%
Median weekly rent: $430
Gross rental yield: 4.73%
Median unit price: $441,946
Quarterly growth: -0.80%
Annual growth: -7.31%
Average annual growth: 11.99%
Median weekly rent: $428
Gross rental yield: 5.03%
DARWIN
Median house price: $494,549
Quarterly growth: 4.36%
Annual growth: 12.67%
Average annual growth: 15.51%
Median weekly rent: $607
Gross rental yield: 6.38%
DARWIN
Median unit price: $335,201
Quarterly growth: -0.69%
Annual growth: 16.92%
Average annual growth: 15.75%
Median weekly rent: $397
Gross rental yield: 6.15%
CANBERRA
Median house price: $481,883
Quarterly growth: 2.08%
Annual growth: -0.66%
Average annual growth: 5.96%
Median weekly rent: $481
Gross rental yield: 5.19%
Median unit price: $376,578
Quarterly growth: 6.10%
Annual growth: 3.71%
Average annual growth: 8.95%
Median weekly rent: $404
Gross rental yield: 5.58%
Source: RP Data
MORTGAGE INDICATORS
LENDING FOR HOUSING – SEASONALLY ADJUSTED
April 09: $21.547 billion
Change from March 09: Increased by 3.6%
Change from April 08: Increased by 10.7%
AVERAGE NEW OWNER OCCUPIER HOME LOAN
April 09: $264,700
Change from March 09: Increased by 0.5%
Change from April 08: Increased by 11.7%
FIXED-RATE LOANS AS PERCENTAGE OF OWNER OCCUPIER LOANS
April 09: 4.2%
Change from March 09: Up by 1.8%
Change from April 08: Down by 13.3%
FIRST HOME BUYERS AS PERCENTAGE OF OWNER OCCUPIER FINANCE COMMITMENTS
April 09: 28%
Change from March 09: Up by 0.7%
Change from April 08: Up by 11.1%
Source: ABS
BUILDING APPROVALS
TOTAL DWELLING UNITS APPROVED
April 09: 11,402
Change from March 09: Increased by 5.1%
Change from April 08: Decreased by 16.1%
TOTAL PRIVATE SECTOR HOUSES APPROVED
April 09: 8,014
Change from March 09: Increased by 7.2%
Change from April 08: Decreased by 8.5%
TOTAL PRIVATE SECTOR OTHER DWELLINGS APPROVED
April 09: 2,987
Change from March 09: Decreased by 1.4%
Change from April 08: Decreased by 34.0%
Source: ABS
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