November RP Data Housing Update

Capital city home values increased by 1.0% in October, are 2.2% higher over the past three months and 8.9% higher over the past year •Home values increased by 1.0% across the combined capital cities in October however, only Sydney, Melbourne and Brisbane recorded gains. •Over the past three months, values increased by 2.2% however, only Sydney, Melbourne, Brisbane and Adelaide recorded gains. •Capital city home values rose in each capital city over the past year, the greatest increases were recorded in Sydney (13.1%), Melbourne (8.9%), Brisbane (5.6%) and Darwin (5.0%) with all other capital cities recording value growth of less than 4.5%. Sales activity across the country is higher than at the same time last year but has not returned to the heights reached in late 2013 •Over the 12 months to August 2014 there were 349,612 houses and 135,914 units sold across the country. •House sales are 8.8% higher over the year compared to a 5.0% rise in unit sales. Vendor metrics indicate quite strong housing market conditions •Auction clearance rates are consistently around 70% each week across the combined capital cities. •Discounting levels and days on market are at near historic low levels. Mortgage demand has started to level recently •The RP Data Mortgage Index (RMI) shows that mortgage demand has begun to level over the past couple of months. •ABS housing finance data shows a similar trend with the market largely driven by upgraders and investors. Economic data flows remains mixed •Population growth is winding down but remains high on an historic basis. •Dwelling approvals are high but have eased from their recent peak. •With population growth slowing and building approvals remaining high (despite the recent fall) we may see a better relationship between approvals and population growth over the coming years. •Consumer sentiment has been weak since the Federal Budget and indicates pessimism continues to outweigh optimism. •The unemployment rate has hit 6.2% with employment growth quite slow. •Mortgage rates remain low with banks competing hard for their share of the home loan business.