The Reserve Bank of Australia has released the minutes from its April monetary policy meeting. The board spent some time exploring reasons for the weakness in many of the indicators for housing turnover and building activity across the country. They noted the sensitivity of developers to the outlook for dwelling prices. New dwelling construction has fallen in the December quarter with little sign of pick up in building or loan approvals. The board says, however, house prices have shown some signs of stabilising recently and that auction clearance rates in Sydney and Melbourne have been picking up, despite remaining below their average levels. SQM Research Managing Director Louis Christopher says he’s deeply concerned by the RBA’s comments, refuting the idea that house prices have stabilised, saying they are still falling in many parts of the country. He says the rise in auction clearance rates is small and seasonal.
Meanwhile, the Australian Property Institute survey of over 30 industry players indicates demand for residential property in Brisbane, Sydney and Melbourne is expected to pick up slowly next year. The report says residential property markets in those three capital cities have stalled near the bottom of the property cycle and small advances are likely over the next two years. API vice president Tyrone Hodge believes the Sydney residential property market hasn’t moved very much at all over the past seven years, adding the cost of buying property is unaffordable and that’s likely to keep the market flat.
And the cost of online advertising for selling residential property is steadily rising. It used to be the case that when selling a home, a large amount of the advertising budget would go to print and a smaller amount set aside for websites such as domain and realestate.com.au. But now it seems the gap between print and online advertising costs is narrowing. Some real estate agents have forecast the cost of advertising online could triple in the next year with most of the increase expected to go to realestate.com.au. Up to $2500 can be spent on upgrading an online ad, and these costs are mostly being passed onto the home seller.
Finally, the Housing Industry Association has revealed the ACT and Victoria have been identified as stand-out building and population “hotspots”. Victoria registered nine of the top twenty national hotspots. A hotspot is defined as a local area where population growth exceeds the national rate and where the residential building work approved is more than $100 million. Canberra city claimed the top spot. Western Australia had five hotspots in the top twenty, Queensland three and the Northern Territory one. NSW, South Australia and Tasmania didn’t make the top twenty list at all.
