Housing Value

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
<p>GUEST OBSERVER</p>
<p>The CoreLogic Home Value Index of capital city home prices rose by 1.4 percent in February and was up 11.7 percent over the year.</p>
<p>Prices rose in five of the eight capital cities with Canberra up the most (up 3.2 per cent). Regional house prices rose by 0.6 per cent in January (latest available).</p>
<p>The Performance of Manufacturing index rose by 8.1 points to 59.3 in February – the strongest result since 2002. A reading above 50.0 indicates that the sector is expanding. This was the fifth consecutive month of expansion.</p>
<p>Home price data is important for retailers, especially those focussed on consumer durables. The manufacturing data provides guidance for companies in the Industrials sector.</p>
</div>
<div class="column"> </div>
<div class="column"><a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%2011.55.01%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="https://www.urban.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%2011.55.01%20AM.png" alt=""></div>
<div class="column"> </div>
<div class="column">What does it all mean?</div>
<div class="column"> </div>
<div class="column">It might just be one of the better days when it comes to economic data. Stronger home prices and the strongest expansion in manufacturing in 15 years. In addition the just-released economic growth data confirmed the momentum shift across the Australian economy.</div>
<div class="column"> </div>
<div class="column">It may be no surprise to see that home prices continue to lift across most capital cities. But what was clearly surprising was the size of the lift in prices. Across the nation home prices rose by a substantial 1.4 per cent in February, matching a similar result in December - the fastest monthly growth in 9 months. In fact over the three months to February home prices have accelerated by 3.5 per cent.</div>
<div class="column"> </div>
<div class="column">Across the capital cities, Sydney and Melbourne featured heavily but what was more encouraging was the strength in Canberra and Hobart home prices. Canberra prices rose by 3.2 per cent in February to be up 10.4 per cent over the year. Interestingly the key resource states continued to see significant weakness, with substantial falls in home prices across Darwin and Perth. The sustained lift in commodity prices may help to alleviate some of the weakness in coming months.</div>
<div class="column"> </div>
<div class="column">Overall policymakers will keep a close eye on the housing sector the early part of 2017, and will prefer to see more balanced house price growth across the nation. In particular, a lift in regional house prices would be a positive outcome. Annual growth in home prices across regional centres was just 1.1 per cent over the past 12 months.</div>
<div class="column"> </div>
<div class="column">What do the figures show?</div>
<div class="column"> </div>
<div class="column">Home prices</div>
<div class="column"> </div>
<div class="column"> The CoreLogic Home Value Index of capital city home prices rose by 1.4 per cent in February and was up 11.7 per cent over the year.</div>
<div class="column"> </div>
<div class="column">  In regional Australia, house prices rose by 0.6 per cent in January and were just 1.1 per cent higher than a year ago. (Regional prices cover just houses and data is up to the end of January).</div>
<div class="column"> </div>
<div class="column">In capital cities, house prices rose by 1.5 per cent in February while apartment prices rose by 1 per cent. House prices were up 12.0 per cent on a year ago and apartments were up by 9.2 per cent.</div>
<div class="column"> </div>
<div class="column">The average Australian capital city house price (median price based on settled sales over quarter) was $600,000 and the average unit price was $495,000.</div>
<div class="column"> </div>
<div class="column"><a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%2011.55.07%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="https://www.urban.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%2011.55.07%20AM.png" alt=""></div>
<div class="column"> </div>
<div class="column">Dwelling prices rose in five of the eight capital cities in February: Canberra (up 3.2 per cent), Sydney (up 2.6 per cent), Melbourne (up 1.5 per cent), Hobart (up 1 per cent), and Adelaide (up 0.6 per cent). Prices fell the most in Darwin (down 4.3 per cent), Perth (down 2.4 per cent), and Brisbane (down 0.4 per cent).</div>
<div class="column"> </div>
<div class="column">Home prices were higher than a year ago in six of the eight capital cities. Prices rose most in Sydney (up 18.4 per cent); followed by Melbourne (up 13.1 per cent), Canberra (up 10.4 per cent); Hobart (up 5.8 per cent); Adelaide (up 3.5 per cent); and Brisbane (up 2.2 per cent). Prices fell in Perth (down by 4.5 per cent) and Darwin (down 5.3 per cent)</div>
<div class="column"> </div>
<div class="column">Total returns on capital city dwellings rose by 15.4 per cent in the year to February with houses up 15.7 per cent on a year earlier and units up 13.8 per cent.</div>
<div class="column"> </div>
<div class="column">Performance of Manufacturing\</div>
<div class="column"> </div>
<div class="column"> The Performance of Manufacturing index rose by 8.1 points to 59.3 in February – the strongest result since 2002. A reading above 50.0 indicates that the sector is expanding. This was the fifth consecutive month of expansion.</div>
<div class="column"> </div>
<div class="column">AIG notes “Six of the seven activity sub-indexes in the Australian PMI® expanded in February (seasonally adjusted). Encouragingly for the outlook, new orders (60.6 points) and sales (55.3 points) grew strongly. Production jumped from stable conditions in January to a strong expansion (65.3 points), as did employment (57.5 points). Deliveries lifted out of contraction (56.3 points) while exports strengthened further (57.0 points). Reflecting this surge in demand, inventories contracted mildly in the month (48.3 points.”</div>
<div class="column"> </div>
<div class="column"> “Comments from manufacturers in February indicate that demand looks to be increasing and confidence returning to some of the larger sub-sectors such as food processing and machinery and equipment (other than auto). Exports are continuing to provide a good source of growth, as are large transport infrastructure projects and increased activity in parts of mining and agriculture in response to the recovery in prices for bulk commodities, wool and some grains. On the inputs side, energy costs and energy reliability are posing a significant threat to ongoing profitability and viability for some manufacturers.”</div>
<div class="column"> </div>
<div class="column">What is the importance of the economic data?</div>
<div class="column"> </div>
<div class="column">The CoreLogic Hedonic Australian Home Value Index is based on Australia’s biggest property database. Unlike the ABS Index, which excludes terraces, semi-detached homes and apartments, the CoreLogic Hedonic Index includes all properties. Home prices are an important driver of wealth and spending.</div>
<div class="column"> </div>
<div class="column">The Australian Industry Group compiles the Performance of Manufacturing Index (PMI) each month. The Australian PMI is the Australian equivalent of the US ISM manufacturing gauge. The PMI is one of the timeliest economic indicators released in Australia. The PMI is useful not just in showing how the manufacturing sector is performing but in providing some sense about where it is heading. The key ‘forward looking’ components are orders and employment.</div>
<div class="column"> </div>
<div class="column">What are the implications for interest rates and investors?</div>
<div class="column"> </div>
<div class="column">Activity in the manufacturing sector is encouraging especially the lift in new orders that has been identified in recent months. All the published data and anecdotes indicate that business conditions have markedly improved since the flat spot recorded for the economy in mid-2016.</div>
<div class="column"> </div>
<div class="column">Investors are once again driving key housing markets such as Sydney and Melbourne. But there are more risks, with investors relying on expected capital appreciation for returns on their investment rather than rising rents. More apartments are being built, supply will catch up to demand and growth of home prices will ease over the next few years. Investors need to be aware of the risks including further actions by regulators to slow housing demand.</div>
<div class="column"> </div>
<div class="column">The broad-based health of Australian housing markets reduces the potential for further rate cuts. While fixed-term lending rates have lifted, it is still too early to canvas possible rate hikes from the Reserve Bank. </div>
<div class="column"> </div>
<div class="column"><em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></em></div>
</div>
</div>
</div></body></html>

jchancellor-FAypfDUnLy

Home prices and manufacturing activity accelerate: Savanth Sebastian

<html><body>
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
<p>GUEST OBSERVER</p>
<p>The solution to Sydney’s affordable housing problems is contained in the existing legislation and recommendations of the Affordable Housing Taskforce as outlined on the Department of Planning’s website.</p>
<p><span>The Affordable Hou</span><span>sing Taskforce report to the Coalition Government in 2012 clearly stated that the private sector will not enter the affordable housing </span><span>market without incentives (Action 5).</span></p>
<p><span>The Affordable Housing Taskforce report said ‘These incentives have been particu</span><span>larly attractive where the bonus represents significant value</span><span>’</span><span>(Cl 4.12). </span></p>
<p><span>The Taskforce report supported the principle of the Affordable Rental Housing State Environmental Planning Policy (SEPP) as a good way to generate </span><span>affordable housing.</span></p>
<p><span>The Urban Tas</span><span>kforce, representing property developers, has presented to the NSW Government a clear strategy to produce 40,000 affordable homes over a 10 year period by slightly changing the NSW </span><span>Government’s current incentive in the Affordable </span><span>Rental Housing SEPP.</span></p>
<p><span>The current Affordable Rental Housing SEPP is based on rental housing being for a period of 10 years </span><span>through ‘a restriction on the occupation certificate ag</span><span>ainst the title of the property</span><span>’ (Cl17) and the Urban </span><span>Taskforce proposal uses exactly the same definit</span><span>ion.</span></p>
<p><span>Since the Affordable Rental Housing SEPP was introduced a relatively small number of affordable homes </span><span>have been produced because the incentives have been too low. With a lifting in the incentives thousands of affordable housing homes can be built in metropolitan Sydney.</span></p>
<p><span>The Coalition Government’s Taskforce raised concerns that inclusionary zoning would only work where </span><span>land value was high. </span><span>‘</span><span>Inclusionary zone policies have been shown to work most effectively in high value land locations and have li</span><span>mited application in lower cost markets.’ (Cl 4.14). The </span><span>Urban Taskforce approach is </span>an incentive that is adjusted to all suburbs irrespective of land value.</p>
</div>
</div>
</div>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<p><span>It seems that th</span><span>e approach now preferred by the Greater Sydney Commission is to force inclusionary zoning as a tax on new housing development. While this may work where land value is high, like Vaucluse, </span><span>it is unlikely that the suburbs that really need affordable housing will benefit.</span></p>
<p><span>The Urban Taskforce is keen to work with the NSW Government to </span><span>generate thousands of new affordable homes across Sydney. To simply force a new tax on the development industry in Sydney will act as a disincentive on the private sector to provide homes. By default it will be the NSW Government who will need to provide massive numbers of affordable homes.</span></p>
<p><em>Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.Vdaart55dFI" target="_blank">here</a>.</em></p>
</div>
</div>
</div>
</body></html>

Affordable housing solution for Sydney is contained in Planning Department Policies: Chris Johnson

<html><body>
<p>EXPERT OBSERVER</p>
<p>The CoreLogic Home Value Index results for October out today confirm a 1.2% rise in national dwelling values over the month, delivering the fourth straight month of rising values.  </p>
<p>The October result was the largest month-on-month gain in the national index since May 2015.</p>
<p>The recent gains come after a broad-based decline in housing values, with the national index declining 8.4% between October 2017 and June 2019.  </p>
<p>The positive October result takes national dwelling values 2.9% off their June 2019 floor, however values remain 5.7% below their peak, highlighting that despite the recent gains, home values are at a similar level to where they were three years ago.  </p>
<p><img src="https://www.corelogic.com.au/sites/default/files/2019-11/index_results_as_at_20191031.png" width="600" height="283"></p>
<p>The strongest growth conditions continue to be centered in Melbourne and Sydney, however dwelling values trended higher across most of the capital cities as lower mortgage rates and improved credit availability spurred on buyer demand.  </p>
<p>Dwelling values were up across every capital city apart from Perth over the month, and based on the rolling three-month change, the only capitals where values fell were Perth (-1.7%) and Darwin (-1.2%).  </p>
<p>The stronger rebound in Melbourne and Sydney can be attributed to a blend of factors; tighter labour market conditions and stronger population growth relative to the other capitals, coupled with the stimulatory effect of the lowest mortgage rates since the 1950’s, and improved access to credit.  </p>
<p>Stamp duty exemptions for first home buyers purchasing under specific price points have added additional stimulus to housing demand.  </p>
<p><img src="https://www.corelogic.com.au/sites/default/files/2019-11/change_since_peak_20191031.png" width="600" height="473"></p>
<p>The recovery trend in Melbourne overtook Sydney in October, with dwelling values surging 2.3% higher over the month; the largest month-on-month gain since November 2009.  </p>
<p>Melbourne housing values have recovered 6.0% since moving through a trough in May 2019, while Sydney values are up 5.3% since the recent May low.<br><br>The smaller capitals have delivered a mixed performance, although the general theme is one of improving conditions.  </p>
<p>The rolling three-month change in Brisbane housing values (+1.1%) was the highest since December 2015, Adelaide (+0.1%) posted the strongest rolling quarter since December 2018, while Hobart (+1.0%) and Canberra (+2.4%) recorded the largest three month rise in values since March 2019 and May 2017. <br><br>The downwards trend in Perth and Darwin home values has continued, however both markets are showing an improvement in the trend rate of decline.  </p>
<p>The rolling three-month trend in Perth housing values recorded the smallest decline in fourteen months (-1.7%) and Darwin dwelling values posted a rare monthly rise in October.  </p>
<p>Both cities have seen dwelling values consistently trending lower since mid-2014, with Darwin down a cumulative 31% and Perth values 22% lower.  </p>
<p>Perth is now recording the lowest median house value of any capital city ($451,800) and Darwin house values are a close second with a median of $468,300.  </p>
<p>Unsurprisingly, the Northern Territory and Western Australia are also showing the highest proportion of first home buyer activity, with first time buyers not weighed down by negative equity and with the ability to take advantage of very affordable housing in these regions. </p>
<p><em><strong>TIM LAWLESS</strong> is the CoreLogic Head of Research</em></p>
</body></html>

tlawless-5VLUrbAk9s

Property values see fourth month of consecutive growth: Tim Lawless

<html><body>
<p>Pinned to the wall beside my computer is a report I wrote in June 2015 entitled “Top 20 worst predictions about Australian property markets”.</p>
<p>It contains a stunning line-up of doomed forecasts from the previous six or seven years about our property markets. They all have two things in common: they all predicted massive price decline, and none of them was correct.</p>
<p>But they’re still out there and media never tires of them. Forecasts of price collapse are a dime a dozen in mainstream media. </p>
<p>In many cases, I suspect, the forecasters don’t really believe their own statements. The objective is to generate publicity, truth notwithstanding. Apart from anything else, no one (apart from me) ever checks to see how the forecasts of the past have turned out, so the fallout for false prophets is zero.</p>
<p>So if American spruiker Harry S Dent pops up in Australia next year and predicts a 50 percent collapse in property values, he’ll get masses of free publicity for his seminar tour or book launch, despite having made that prediction twice before (in 2011 and 2014) and been proven wrong by subsequent events.</p>
<p>Predictions of real estate Armageddon in Australia have become common. One of the most recent was widely reported around Australia in early September. This headline appeared in <em>The Australian</em>: “Australia six weeks from a housing collapse, US report warns.” Time is well and truly up on that forecast and we do not appear to have a housing collapse.</p>
<p>The Washington-based International Strategic Studies Association said: “We estimate that Australia has about six weeks or so to turn this situation around, otherwise there would be a massive hit on property valuations and the building trades.”</p>
<p>Its president delivered quite a rant on the subject. You have to wonder why serious newspapers would report such nonsense, particularly given the failure of other similar predictions since the start of the century.</p>
<p>Here’s another example: in October 2015 the <em>Sydney Morning Herald</em> made a huge front-page splash with this headline: “7.5 percent - house prices tipped to slump.” The 7.5 percent was in huge type and dominated the page.</p>
<p>The article said “Australian house prices” would fall 7.5 percent in 2016 and the decline risked causing a recession. It quoted reports from several investment banks – Macquarie, Credit Suisse and Bank of America Merrill Lynch – which all made dire forecasts.</p>
<p>One said property investment in Australia was “riskier than the equity market”, especially in Sydney. Another said the RBA would be forced to lift interest rates in 2016 to tackle high inflation. How wrong did they get that?</p>
<p>When will media ever learn that economists are not real estate specialists and seldom get it right when they drift outside their comfort zones (getting it wrong on the economy) and delve into property prognostication? They regard Australia as a single property market and their understanding of the different market dynamics around Australia could be written on the back of a postage stamp – in crayon.</p>
<p>Other media outlets made big of the same material. The <em>news.com.au</em> website ran this headline: “Five months until property bubble bursts”. The article began: “FIVE months. That’s how long before house prices start to fall, according to the latest major investment bank to call the peak in Australia’s housing cycle. ‘Credit growth, auction clearance rates, house prices, settlement volumes and the dollar value of settlements are all showing signs of slowing, albeit from lofty levels,’ analysts from investment bank Macquarie said in a note today, <em>The Australian</em> reports.”</p>
<p class="Body">In November last year the <em>Australian Financial Review</em> ran a major article based on the forecasts of ANZ economists, who predicted that Australian house prices would fall in 2016 by “less than 10 percent”. There, again, we had that fatal formula for failed forecasts: economists, a perspective that Australia is a single market and a gloomy outlook based on a misreading of the signals.</p>
<p class="Body">Around the same time, the clown prince of failed forecasting Professor Steve Keen was at it again, still predicting a property crash – as he famously did in 2008 and every year since – and once gain getting it wrong.</p>
<p class="Body">Also around the same time, <em>Smart Property Investment</em> ran this headline: “Outer suburb markets could halve in value”, referring to the outer ring suburbs of Sydney. A year later, it’s pretty clear than suburban values have not dropped 50 percent.</p>
<p class="Body">In January this year the same magazine reported more dodgy predictions from economists under the headline “Investors warned about looming price declines”. Leading that particular charge was the man with worst record of all in real estate forecasting, AMP Capital chief economist Shane Oliver.</p>
<p class="Body">Oliver is probably the only guy who has made negative forecasts about housing prices than Steve Keen, and with an equivalent track record of success. It was Oliver who famously declared in 2005 that there would be no growth in Australian property prices any time in the next 10 years. Oh dear.</p>
<p class="Body">He’s made many similar statements over the years, with the same level of success. But he was back for more in January this year, stating that the Sydney market had become so stretched that prices were likely to fall. </p>
<p class="Body">Also mentioned in that SPI article was Fitch Ratings, which claimed that “house price growth is set to decline significantly in 2016, with the possibility of entering negative territory …”</p>
<p>According to Fitch Ratings Australia managing director Ben McCarthy, the downturn would be caused by “reduced demand in Sydney and Melbourne as population growth declines and the market reaches limits of affordability and investor demand and interest recedes".</p>
<p>If there’s a group that has even less success at calling property market outcomes than bank economists, it’s the ratings agencies whose track record is just dismal – and whose motivations are particularly shallow.</p>
<p class="Body"><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
</body></html>

terryryder-YECXbqmri2

Forecasts of housing price collapse are a dime a dozen

<html><body>
<p>EXPERT OBSERVER</p>
<p>The combined effect of low rental yields and declining dwelling values has resulted in a rapid reduction in overall returns from housing over the past year.</p>
<p>According to the CoreLogic Total Returns Index, over recent year’s value growth has been much stronger than rental returns, showing that the majority of the returns have been achieved via capital gains rather than rental income.</p>
<p>With dwelling values now falling and gross rental yields close to historic lows, the total returns from residential housing are not looking so attractive and a greater share of returns are coming from the yield component.</p>
<p><img src="https://www.urban.com.au/images/2018/8/13/PP%20CL%201.JPG" alt=""></p>
<p>National dwelling values fell by -1.6% over the 12 months to July 2018, total annual returns have fallen to just 1.9% and are now at their lowest since June 2012.</p>
<p>The fall in total returns has been substantial given that a year earlier total returns were recorded at 14.2%.</p>
<p>Across the combined capital cities, total returns over the 12 months to July 2018 were recorded at 0.8% - the lowest they have been since May 2012.</p>
<p>Total returns across the combined regional markets were recorded at 6.6% over the past year – again, the lowest they have been since June 2013.</p>
<p><img src="https://www.urban.com.au/images/2018/8/13/PP%20CL%202.JPG" alt=""> </p>
<p>A year ago, annual total returns were recorded at 14.8% across the combined capital cities and 12.0% across the combined regional markets.</p>
<p>Over the past 12 months, total returns in Sydney have fallen by -2.5%.</p>
<p>This -2.5% fall in returns is the weakest result since February 2009 and represents a substantial slowdown in annual returns from July 2017 when they had increased by 19.0%.</p>
<p>With dwelling values falling -5.4% in Sydney over the past year it highlights that value changes largely dictate total returns in Sydney.</p>
<p>In regional NSW total returns increased by 6.7% over the past year that was the smallest annual increase since February 2013.</p>
<p>Annual returns in regional NSW have slowed from 17.1% a year ago.</p>
<p><img src="https://www.urban.com.au/images/2018/8/13/PP%20CL%203.JPG" alt=""></p>
<p>Value falls in Melbourne over the past year have seen a substantial reduction in total returns.</p>
<p>Over the past year, Melbourne recorded at 2.4% reduction that was down from 16.6% a year ago and was also the lowest annual return since October 2012.</p>
<p>Total returns in regional Vic have remained much more stable than those in Melbourne.</p>
<p>Over the past 12 months, total returns in regional Vic have been recorded at 9.8% which was only slightly lower than the 10.4% total returns recorded a year ago.</p>
<p>Value growth is only slightly lower than it was a year ago in regional Vic which is a key contributor to fairly steady total returns.</p>
<p><img src="https://www.urban.com.au/images/2018/8/13/PP%20CL%204.JPG" alt=""></p>
<p>Over the past year, dwelling value growth has slowed across Qld which has contributed to a moderate reduction in total returns.</p>
<p>Over the year, total returns in Brisbane were recorded at 4.8% which was the lowest return since July 2013 and down from 7.5% a year ago.</p>
<p>Regional Qld total returns were slightly stronger than those in Brisbane were at 5.2% however, they too were down from 9.1% a year ago and the 5.2% was the smallest annual return since October 2012.</p>
<p><img src="https://www.urban.com.au/images/2018/8/13/PP%20CL%205.JPG" alt=""></p>
<p>The rate of dwelling value growth has slowed over the past year in Adelaide and so too have total returns while the rate of value decline in regional SA has slowed, providing a boost to total returns.</p>
<p>Total returns in Adelaide were recorded at 4.9% over the past year compared to a 6.1% return in regional SA.</p>
<p>In Adelaide, returns have fallen from 9.9% a year ago and are the lowest they have been since June 2013.</p>
<p>Total returns in regional SA have increased from 5.2% a year ago and are the highest they have been since January 2017.</p>
<p><img src="https://www.urban.com.au/images/2018/8/13/PP%20CL%206.JPG" alt=""></p>
<p>Although values have fallen over the past year in both Perth and regional WA, total returns in each region remain positive.</p>
<p>Over the past 12 months, total returns in Perth were recorded at 1.6%, which was an increase from 1.2% a year ago however, annual returns have eased slightly over recent months.</p>
<p>In regional WA, total returns were recorded at 0.6% over the past year compared to 1.8% a year ago.</p>
<p><img src="https://www.urban.com.au/images/2018/8/13/PP%20CL%207.JPG" alt=""> </p>
<p>With strong increases in dwelling values over the past year, Hobart has recoded the nation’s highest total returns at 17.1%.</p>
<p>Although 17.1% represents much stronger returns than all other capital cities it is lower than the 19.7% a year ago and also lower than the recent peak of 20.2% in September 2017.</p>
<p>Regional Tas has also generated comparatively high total returns over the past year of 12.0%.</p>
<p>The 12.0% annual returns are down from 14.1%, a year ago which was the recent peak.</p>
<p><img src="https://www.urban.com.au/images/2018/8/13/PP%20CL%208.JPG" alt=""></p>
<p> </p>
<p>There is a big discrepancy between total returns in Darwin and regional NT, which is also reflective of the significant differences in value changes over the past year.</p>
<p>Over the past year, total returns in Darwin were recorded a -0.8% which is down from a positive returns of 2.5% a year ago.</p>
<p>Although total returns are falling, the magnitude of the fall has slowed over the past two months.</p>
<p>In regional NT, total returns were recorded at 12.3%, which was a substantial improvement on the 1.4% annual return a year ago.</p>
<p><img src="https://www.urban.com.au/images/2018/8/13/PP%20CL%209.JPG" alt=""></p>
<p>Over the 12 months to July 2018, total returns for Canberra dwellings were recorded at 7.0%.</p>
<p>The 7.0% annual return was lower than the 12.8% recorded over the previous 12 months.</p>
<p>As the chart below shows, returns have trended lower over the past year but have begun to stabilize over recent months.</p>
<p><img src="https://www.urban.com.au/images/2018/8/13/PP%20CL%2010.JPG" alt=""></p>
<p>The most recent data shows that there has been a significant fall in investor mortgage demand.</p>
<p>Over recent years most of this demand has been in Sydney and Melbourne, both of which have seen a significant slowdown in total returns over the past year.</p>
<p>Given the decline in returns and an expectation that returns will continue to shrink as values decline further, it is anticipated that investor mortgage demand will also shrink, particularly in Sydney and Melbourne.</p>
<p>Investors could see renewed interest for housing in other regions of the country where total returns remain positive however, however the returns are anticipated to be far inferior to those recorded over recent years in Sydney and Melbourne.</p>
<p><em>Cameron Kusher is a CoreLogic Research analyst </em></p>
</body></html>

ckusher-ujnxiKuFQs

Returns on residential housing continue to fall: Cameron Kusher

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
<p><span>Capital city home values increased 2.8% in July with national home values 11.1% higher now compared to the same period last year.</span></p>
<p><span>According to the CoreLogic RP Data July Home Value Indices 2015 the total aggregated value of Australian housing has increased by just over half a trillion dollars over the past twelve months. </span></p>
<p><span>Over the three months to July, Melbourne home values increased 6.1%, although Melbourne houses suffered the lowest rental yields of 3% and units 4.1%</span></p>
<p><span>CoreLogic RP Data’s head of research Tim Lawless said the strongest growth conditions outside of Sydney and Melbourne have been in Brisbane where dwelling values were 3.9% higher over the year.  </span></p>
<p><span>“While Sydney and Melbourne values continue to boom, the next best performing city, Brisbane, has seen dwelling values rise by just 3.9% over the past twelve months. Based on the median dwelling price, Sydney prices are now 72% higher than Brisbane’s and Melbourne’s are 24% higher,” Mr Lawless said.  </span></p>
<p><span>“Across every capital city except Hobart and Darwin, we are seeing detached housing outperform units for capital gain, with house values up 11.6% compared with a 7.2% increase in unit values over the past year. The differential is most pronounced in Melbourne where house values have surged 12.3% higher over the year compared with a 4.8% rise in unit values. </span></p>
<p><span>"With value growth once again accelerating across Sydney and Melbourne, the market evolution in mortgage lending policies will will provide a timely test for housing demand, particularly from investors. The combined effect of tighter lending parameters with more focus on serviceability and low LVR’s, potentially higher mortgage rates for investment loans as well as limitations on the pace of investment lending imposed by APRA on Australia’s banks should conspire to slow investor demand in the market." </span></p>
<p><span>Sydney's 3.3% rise in dwelling value for the month, delivered an 18.4% rise for the year - the highest rate of growth in the city since 2002, according to Tim Lawless.</span></p>
<p><span>"The Sydney dwelling value is now 40% higher than its previous peak," he noted.</span></p>
<p><span> </span></p>
<p><a href="/images/2015/08/03/Screen%20Shot%202015-08-03%20at%2010.41.42%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/08/03/Screen%20Shot%202015-08-03%20at%2010.41.42%20AM.png" alt=""> </span></p>
<p><a href="/images/2015/08/03/Screen%20Shot%202015-08-03%20at%2011.44.51%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/08/03/Screen%20Shot%202015-08-03%20at%2011.44.51%20AM.png" alt=""></span></p>
<p><span> </span></p>
</div>
</div>
</div>
</div></body></html>

mick.cee-iDmgDDAmu8

National home values up 11.1% annually: CoreLogic RP Data July Home Value Indices 2015

<html><body>
<p>Geoff Baldwin of RE/MAX Lighthouse Realty Western Australia suggests the time is right for opportunistic buyers in Western Australia looking to secure value.</p>
<p>As the real estate market moves into the annual Spring/Summer resurgence there remains a window of opportunity to take advantage of some great buys, especially in the middle to upper price ranges with the Northern suburbs standing out according to RE/MAX WA managing director, Geoff Baldwin.</p>
<p>“Homes in suburbs like Ocean Reef, Connolly, Iluka, Currambine, Burns Beach and Jindalee are all selling well below what they would cost to buy land and build and the added bonus is that the owners of these properties have invariably added extra value by way of pools, pergolas, solar boosters, etc that they tend to discount at sale time”, he said.</p>
<p>“It is also a fact that people selling lower priced properties are not having to drop their prices by near the percentage that is happening further up the market and this means they have a window of opportunity to upgrade that will only remain open for a limited time.</p>
<p>“Properties along the coast that were selling for over a million dollars are now going for high eight hundreds to early nine hundreds and buyers are now really beginning to recognise this value.</p>
<p>“Upgraders should not hesitate to consider making offers subject to the sale of their present property provided the owners of the one they are buying are willing to give them time to sell however this will always depend on how saleable their current home is made.</p>
<p>“This irregularity in the market is primed for upgraders to take action however it will not exist for a long period because, as the weather heats up so too will the market with the result that stock levels will reduce and prices will bounce back quickly”, Mr Baldwin said.</p>
</body></html>

Housing Value

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Housing Value

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News