A series of housing reports have highlighted the plight of the Australia's property market, dragged down by falling consumer confidence. Capital expenditure figures on buildings and equipment were a bright spot, jumping more than expected in the second quarter.
First up, new home sales have fallen to their lowest level in more than a decade. The Housing Industry Association-JeldWen survey of Australia's major residential builders has revealed the second straight monthly 8 per cent fall in sales. In July new home sales fell 8 per cent to 6,428, extending the decline from June when sales fell 8.7 per cent.
The falls in detached new homes sales were led by Western Australia, where sales were down 12.7 per cent, followed by New South Wales where sales fell 11.2 per cent and Queensland, where sales were down 8.5 per cent in July.
HIA chief economist Dr Harley Dale says the latest figures reinforce the marked deterioration in new home building conditions that Dr Dale believes how now "hit the wall".
This outlook was supported by data from the Australian Bureau of Statistics, showing worse than expected home building approvals figures. The ABS reported that home building approvals added 1 per cent to 12,227 units in July, following a drop of 3.5 per cent the month before. The ABS also released second quarter capital expenditure figures that beat market expectations. New private capital expenditure rose 4.9 per cent in the June quarter, showing a jump in Australian business investment and coming in higher than the 4 per cent lift that was forecast.
Data from RP Data-Rismark painted the same picture. The property research group's Hedonic Home Value Index showed that capital city house prices fell for the seventh straight month in July, down 0.6 per cent, from a fall of 0.3 per cent the month before. In the first seven months of this year capital city home prices were down 3.4 per cent, pushing the average price of a capital city home to $455,000. A Rismark International economist says the housing market could be at "a crucial inflexion point" and says, "If rates do remain on hold, or begin to fall, we could expect to see Australia's housing market find a base and begin to generate capital gains again".
The falls in capital city house prices were led by a 1.4 per cent fall in Melbourne. However, the capital city of Victoria has also been judged the world's most liveable city. According to the latest Economist Intelligence Unit's Global Liveability Survey Melbourne scored 97.5 per cent to eclipsed Vancouver for the first time since 2002, as the best city in the world to live. The rank of 140 cities in the world saw four Australian cities in the top ten. Sydney came in the sixth spot, Perth and Adelaide both came in eighth and Brisbane came in the 21st position. The editor of the survey said Australian cities are among the world's most livable with low population density and relatively low crime rates.
Another survey has shown that more than one third of Australians believe house prices will rise over the next year. A Research and Issues Management Company UMR Research survey of 1000 people has shown 42 per cent believe house prices are on the rise, 11 per cent are predicting little will change and only 8 per cent expect prices to continue to fall.
