Capital city house values fell 2.8 per cent for the year to June according to RP Data. Brisbane experienced the largest drop of 6.9 per cent. There wasn’t a single region in Brisbane that witnessed positive growth in house values. Perth wasn’t far behind with values falling 6. 2 per cent, with all regions in decline. The city’s most expensive areas recording the largest falls. The best performer was the Sydney detached housing market, values still declined, buy only just. There were a number of areas in Sydney that actually recorded positive value growth, with the inner west growing 10 per cent. Melbourne has been the best performing capital city since 2007, but house prices still fell 2.6 per cent over the year.
Some good news for mortgage holders, The Reserve Bank Board decided to leave the cash rate unchanged at 4.75 per cent. The Board noted that credit growth is very subdued by historical standards, even with evidence of greater willingness to lend. Housing prices have also softened they said. In response, the Commonwealth Bank cut interest rates for its one and three-year fixed-rate home loans by up to 0.16 per cent.
On that note, the number of dwelling commitments for owner occupied housing finance rose 1.7 per cent in July compared to the month before, in trend terms, according to the Australian Bureau of Statistics. The trend estimate for the value of dwelling finance commitments rose 1.2 per cent. Owner occupied housing commitments rose 1.5 per cent, driven by refinancing across lending institutions.
The Australian Industry Group/Housing Industry Association performance of construction index (PCI) for August dropped 4 points to 32.1, remaining below the 50 point level for 15 straight months. The reason – a further drop in activity and new orders. A lack of new work and tender opportunities, as well as weak consumer confidence adding to the decline.
And in New South Wales, a boost to housing construction, but a blow for first home buyers. At the start of next year, first home buyers of existing houses will lose all stamp duty exemption, with only new houses worth up to half a million dollars fully exempt. New houses between $500,000 and $600,000 will receive partial exemption.
