Australia’s residential property market is headed for its worst year since the GFC according to a report by Fairfax Media. The report is based on lagging auction clearance rates. Melbourne has posted the worst results amongst all major cities, falling to levels not seen since 2004. The Real Estate Institute of Victoria predicts Melbourne’s auction clearance rate will average 57 per cent this year, down from 71 per cent in 2010. Clearance rates in Sydney are on track to average 54 per cent, if you don’t factor in a surge of buying from first home buyers before the end-of-year cut-off on stamp-duty concessions. RP Data has reported a national clearance rate of 48.3 per cent, compared with 60.9 per cent the year prior.
Meanwhile, the Housing Industry Association says new home building is on a consistent downtrend, with renovations the shining light – for the moment. Home owners prefer to renovate, improving their existing homes, rather than trading up. That view is backed up by preliminary Australian Bureau of Statistics data, showing major renovations continue to grow. The September quarter result took the value of work on major renovations to almost $1.9 billion, a record high. But residential building work, seasonally adjusted, fell by 1.1 per cent to $11.4 billion in the quarter. The figures also show a rising interest in apartments, with 57 per cent of all approvals in the residential sector for units rather than houses.
And taking a closer look at residential vacancies. The number of properties available for lease dipped slightly during the month of October according to SQM Research. There are less than 46,000 available properties for rent across Australia, a fall of 0.1 per cent to 1.8 per cent. Melbourne is leading the way in terms of vacancies, with a vacancy rate of 3 per cent and 11,000 properties for rent. Canberra continues to have the tightest vacancy rate of 0.7 per cent, 300 vacancies, joined by Perth which dropped to 0.7 per cent with 1,100 vacancies.
And Sydney rents are increasing faster than inflation. That’s according to the Urban Taskforce. Based on recently released Housing NSW figures, the yearly increase for a one bedroom apartment in Sydney’s inner ring suburbs has been 7.1 per cent, 5.5 per cent for two bedrooms and 9 per cent for three. Botany Bay has seen a rise of 22.6 per cent for one bedroom apartments. Chief executive Chris Johnson says the figures show that poor supply of new houses and apartments is having a major effect on rental costs.
