PROPERTY -- Latest rate rise helps lower inflation, threatens supply265 people have read this article
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| Monday, 26 April 2010 |
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By: Belinda Luc Property price inflation in Australia’s capital cities over recent years has supported the RBA’s move to lift the official interest rate five times in six board meetings but overall the market remains buoyant. The Melbourne property market has grown at a rate of 20 per cent since 2007, according to RP Data research director Tim Lawless. Key drivers such as low interest rates, solid rental yields and first home buyer benefits have all contributed to the capital city’s stellar growth. Similarly, Perth continues to perform well with the median house price hitting $517,198 last month. There are indications that further price growth lies ahead for the Western Australia capital with Australian Property Monitors forecasting this figure to hit $1 million over the next decade. According to RP Data’s Mr Lawless, Queensland and Western Australia are still very much driven by the resources sector. Meanwhile, South Australia has the lowest rate of unemployment plus a healthy level of infrastructure projects. All of those factors will contribute to solid growth over the next few years. While the latest interest rate rise may well take some of the heat out of the property market across Australia’s capital cities, there is a danger that higher rates could deflate the building and construction industry. The latest Performance Construction Index recorded a 4.1 point slump in building activity in March to 48.7 – slightly below the 50-point level that indicates expansion, according to the Australian Industry Group. NSW Urban Taskforce director Aaron Gadiel says the latest rate rise will undermine the demand for housing and boost the holding costs faced by developers. He says the rate rise will also make it more difficult for developers to demonstrate project viability. Whether or not this trend will adversely impact the housing market remains to be seen.
Prices and indicators Latest figures SYDNEY Median unit price: $484,252 MELBOURNE Median unit price: $443,971 BRISBANE Median unit price: $362,093 ADELAIDE Median unit price: $371,930 PERTH Median unit price: $489,465 DARWIN Median unit price: $429,547 CANBERRA Median unit price: $414,404 Source: RP Data
Mortgage indicators LENDING FOR HOUSING – SEASONALLY ADJUSTED AVERAGE NEW OWNER OCCUPIER HOME LOAN FIXED-RATE LOANS AS PERCENTAGE OF OWNER OCCUPIER LOANS FIRST HOME BUYERS AS PERCENTAGE OF OWNER OCCUPIER FINANCE COMMITMENTS Source: ABS
Building Approvals TOTAL DWELLING UNITS APPROVED TOTAL PRIVATE SECTOR HOUSES APPROVED TOTAL PRIVATE SECTOR OTHER DWELLINGS APPROVED Source: ABS |
