Australian property prices dip in april
Residential property prices in the capital cities fell by 0.5 per cent in April 2013, despite a strong 2.8 per cent increase over the first quarter of the year.
The negative result for April brings the rolling quarterly movement in capital city dwelling values back to a more sustainable 1.1 per cent. Since the housing market reached a recent low point at the end of May last year, capital city dwelling values have recovered by 4.2 per cent.
According to RP Data’s director of research, Tim Lawless, the April results represent more of a stumble along the path to recovery than a sign of a renewed trend in value falls:
"When viewed in line with other metrics such as auction clearance rates, private treaty indicators and some improvement in housing finance demand, it is likely that the negative April result will be a blip along the path to recovery.
"We weren’t expecting that the high rate of growth evidenced over the first three months of the year would be sustained into April. A more measured pace of growth is a much more realistic outcome for the Australian housing market, especially considering that the first quarter is typically the strongest for value growth."
Rismark CEO Ben Skilbeck added: "the quantum of the April pullback is seasonally typical of a market pause, meaning that if one were to take seasonal movements into consideration the market is not currently showing any downward trend."
Softer capital city dwelling values were recorded across every capital city apart from Adelaide where dwelling values were up 2.8 per cent over the month and in Darwin where values rose by 0.2 per cent.
According to Mr Lawless, the April results for Adelaide should be interpreted with some caution.
"The strong month-on-month result for Adelaide is more likely the result of natural volatility across a relatively small market rather than the any sort of sustainable surge in dwelling values over the month," Mr Lawless said.
Across the major cities, Sydney values were down 0.4 per cent over the month, Melbourne values saw a 0.5 per cent drop, Brisbane values were down 0.7 per cent. Perth values recorded a 2.5 per cent fall.
Rental prices continue to trend higher with most cities recording an increase in rents. Across the combined capital cities, house rents were up 1.4 per cent over the three months ending April and unit rents were up 1.3 per cent.
Lawless adds: "Despite the improvement in rental rates, gross yields across the combined capital cities have held fairly firm due to the fact that dwelling values are also rising. The greatest yield improvements over the past year have been recorded across the Darwin and Perth markets where rents have been rising much faster than dwelling values. Perth rents are up 10.4 per cent over the past year and Darwin rents are up an even higher 11.4 per cent.
"At the other end of the spectrum, rents are falling across both the house and unit market in Hobart, down -1.3 per cent and -3.5 per cent over the past year. Canberra rents are also showing weakness, down -1.0 per cent for houses over the year.”
He concludes: "Overall the housing market is in much better shape than it was a year ago where values were still falling and market sentiment was very low. Despite the weak April results we are in a market where auction clearance rates are consistently higher than 60 per cent nationally and around the 70 per cent mark in Melbourne and Sydney. Vendors aren’t discounting their asking prices as much as they were a year ago, providing further evidence that buyers and sellers are starting to find some even ground,
“Importantly, our estimate for transaction volumes for the month of February was tracking about 8 per cent higher than a year ago, highlighting the fact that buyers are stepping off the sidelines.”