Property performance this financial year

Real Estate

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This week we take a look at how the property market has performed this financial year. We’ll be focusing on house prices, rents, vacancy rates and the number of properties on the market.
 
Starting with how much your house or investment property is worth today - capital city house prices have fallen 5.3 per cent for the year to May according to RP Data. Premium high-end properties have been the worst hit, falling more than 6 per cent in the year to April. House prices in the more affordable range are down by only 1.5 per cent. Since dwelling values peaked in November 2010 house prices are down by 7.6 per cent.
 
Comparing this most recent March quarter to the last, house prices in capital cities fell by 2.9 per cent reports the Real Estate Institute of Australia. All Australian capital cities contributed to the fall except for Darwin that’s unchanged and Melbourne increased by 0.9 per cent. The largest falls have been seen in Adelaide, with prices reducing 6.3 per cent to $380,000. For other dwellings, not houses, prices decreased half a per cent. The weighted average median house price for the eight capital cities is now $520,000.
 
Turning now to rents, comparing the March quarter this year to the same quarter last year, Hobart was the only capital city to record a decrease in median house rents, down 5.6 per cent reports the Real Estate Institute of Australia. Rent for three bedroom houses increased the most in Perth, up 9 per cent to $425 a week. 
 
And now to vacancy rates – keeping in mind that vacancy rates below 3 per cent indicate strong demand for rental accommodation and rates higher than 3 per cent show an oversupply. The yearly change to March shows an increase in vacancy rates in Sydney to 1.5 per cent, Melbourne 2.2 per cent, Adelaide 3.3 per cent, Hobart 3.2 per cent and Canberra 2 per cent. Vacancy rates fell in Brisbane to 2.2 per cent, Perth and Darwin 2.6 per cent.
 
And looking at the number of properties for sale, we saw a peak in March this year with total online listings of houses and apartments reaching record levels. That’s according to data from SQM Research. Year-on-year, the number of properties for sale rose slightly, increasing by 3 per cent since May 2011. Not much of an increase, but if you compare May 2011 with the year before, you can see a dramatic change. By May last year there were 30 per cent more listings than at the same time in 2010. So perhaps the story is not that the number of property listings has been relatively steady over the past year, but that there was a surge in property coming onto the market in 2010 and it hasn’t really improved. The good news is, it hasn’t got much worse either. In April of this year the number of houses for sale actually fell, leading many to believe the worst was over. But then, to the surprise of some, the May figures were released, the number of properties rose modestly from the month before leading many to believe the peak was yet to come.
 
As we’ve discovered, different research bodies provide different numbers, even when measuring the same thing, because they all seem to have different ways of measuring it. RP Data estimates the number of properties currently being advertised for sale is around 9 per cent more than this time last year, 9 per cent isn’t a figure that could be described as flat. They report there are more than 300,000 properties advertised for sale across Australia, and that’s proving to be another hurdle for the property market.
 
Finally, the Australian Bureau of Statistics has released its 2011 census data, with some interesting insights into the property market. The rental market remains tight, with median rents rising from $190 a week in 2006 to $285 a week in 2011. $285 a week may sound like a bargain, but it takes into account rents across the country as well as low income housing. The census also reveals the median monthly mortgage repayment was $1800. And 32 per cent of people own their own home, 35 per cent own with a mortgage and 30 per cent rent.