A difficult spring selling season has come to an end. The last weekend in November is usually a busy time for house-buying, a last minute rush before the year comes to a close. But lacklustre auction clearance rates have led to a disappointing finish. Only 55 per cent of properties in Sydney were sold, according to Australian Property Monitors. In Melbourne, just 53 per cent, reports the Real Estate Institute of Victoria.
Home values in Australia are overvalued by at least 25 per cent. That's according to The Economist. But it's not just house prices down under, with Belgium, Canada, France, New Zealand, Britain, the Netherlands, Spain and Sweden all said to be overvalued by 25 per cent or more. The report looks at two measures of valuation. The first is the price-to-income ratio, a gauge of affordability. The second is the price-to-rent ratio. A popular argument often used to back up the skyrocketing price of housing in Australia is that a rising population has pushed up demand. But The Economist says this should raise both prices and rents, leaving the ratios unchanged.
And we're already seeing some falls with capital city house prices dipping in October by a seasonally adjusted 0.5 per cent, according to RP Data. For the year to October, prices have fallen 4 per cent. Brisbane led the drop, with an 8 per cent decline. Perth, Melbourne and Adelaide have all fallen 5 per cent in the year to October. Sydney and Canberra lost 1.1 per cent for the year to October.
And building approvals slumped during the month of October, falling 10.7 per cent, seasonally adjusted according to the Australian Bureau of Statistics. Analysts had expected a rise of 3 per cent. Approvals for private sector houses fell 7.5 per cent.
But some good news, new home sales have made a modest recovery in October, according to HIA's latest New Home Sales Report. The number of new homes sold in the month of October increased by 5.5 per cent, although sales fell 8 per cent over the three months.
