Corelogic November House price results data snapshot (by state)

Discussion in 'Property Market Economics' started by craigc, 1st Dec, 2017.

Join Australia's most dynamic and respected property investment community
  1. craigc

    craigc Well-Known Member

    Joined:
    25th Jun, 2016
    Posts:
    1,564
    Location:
    Melbourne
    Updated data for November as analysed by Bank of Melbourne / Westpac / St George


    Data Snapshot – Friday, 1 December 2017


    Dwelling Prices


    Friday, 1 December 2017

    The Descent Continues

    The housing market is continuing to lose steam. Higher mortgage rates for investor and interest-only loans since APRA widened its macro prudential measures in March are biting. Higher household debt combined with weak wages growth is also leading to softer dwelling prices.


    Dwelling prices for the 8 combined capital cities fell 0.1% in November, according to CoreLogic data. The decline was led by Sydney where dwelling prices dropped 0.7% in November and slid 1.3% in the three months to November.


    The cooling in house prices is most evident in Sydney, as both the share of investors and mortgage sizes are greatest. In Melbourne, the slowdown in dwelling prices is far milder, helped by very strong population gains. Conditions are diverse in other capital cities.

    Annual growth for the 8 combined capital cities slowed to 5.5% in November, which was the slowest annual pace since November 2016.

    We expect that the current moderation in housing conditions to continue.
    upload_2017-12-1_18-31-52.png
    Source: CoreLogic

    More steam was let of the housing market in November. Dwelling prices for 8 combined capital cities fell by 0.1% in November. Annual growth for the 8 combined capital cities also slowed, from 7.0% in October to 5.5% in November. It is the slowest rate of annual growth in twelve months. This annual pace is also well off the 2017 peak of 11.4% recorded in May.

    The decline in November has been isolated to houses. Housing prices for the 8 combined capital cities fell 0.2% in November, but unit prices in contrast rose by 0.3%. 5.00 5.50 6.00 Jan-2015 Jan-2016 Jan-Owner-Occupier Interest-Only Loans Investor Interest-Investor Principal & Interest Loans Principal Source: RBA

    The wider APRA macro prudential measures have led to higher mortgage rates for investor loans and interest-only loans. The rise in mortgage rates has been greatest for investors only paying interest. These higher mortgage rates combined with rising household debt are leading to a softening in housing market conditions, including dwelling prices. upload_2017-12-1_18-33-50.png

    Regional areas across Australia recorded growth of 0.2% in November and annual growth of 4.2%. The lift in regional areas meant nationally dwelling prices recorded a flat outcome for the month and 5.2% growth on a year ago.

    By Capital City

    There were diverse housing conditions across the States and territories. Sydney drew plenty of attention. Sydney comprises roughly one fifth of national dwelling housing stock and comprises about one third by value, so Sydney has a material influence over the overall national rates.

    The cooling in dwelling prices is most evident in Sydney. This corresponds with the high proportion of investor activity in the city and tighter APRA measures have been aimed at investors (and interest-only lending). Sydney also has the greatest mortgage sizes of any capital city.

    Sydney dwelling prices fell by 0.7% in November. It is the third consecutive fall and Sydney has recorded no growth in dwelling prices for the past four months. The drop in November is the biggest monthly percentage decline since November 2016. There was a divergence in Sydney between housing and unit prices, however. House prices contracted 1.1% in November, but unit prices grew 0.2%. On a year ago, house prices in Sydney are up 4.4% and unit prices 6.5%. The annual rate for all Sydney dwellings is 5.0%, well down on the peak of 17.1% struck earlier this year in May.

    Sydney and Melbourne are on the radar for regulators and policymakers. However, the Melbourne housing market shows only very mild signs of cooling, as buoyant population gains underpin demand. Melbourne dwelling prices grew 0.5% in November and the annual pace of growth stood at 10.1%. The 10.1% annual growth rate is only modestly down from this year’s peak of 13.1% recorded in May. Auction rates have not subsided significantly in Melbourne, suggesting the cooling of Melbourne’s housing market is likely to be very slow in coming months.

    The anecdotes reveal that Sydneysiders are also turning their sights to Melbourne both as a place to invest and live. While the gap between Sydney and Melbourne dwelling prices is not significantly wide for dwellings in the inner-city ring, it is much wider for the middle and outer rings. Canberra is also benefiting from a "demographic dividend" as Sydneysiders seek more affordable places to live with robust job markets. Data Snapshot – Friday, 1 December 2017

    3

    In other capital cities in November, dwelling prices rose in Canberra (0.9%), Hobart (0.6%), Perth (0.2%) and Brisbane (0.1%). Dwelling prices were flat in Adelaide in the month and fell in Darwin by 0.4%. The annual growth rates for these cities are depicted in the chart on the front page.

    Outlook

    Housing prices are likely to continue to moderate in the year ahead, as higher household debt and the lift in mortgage rates for interest-only and investor loans continues to bite. Weak wages growth is also contributing to the story. However, the solid labour market and low rates of interest on a historical comparison will provide some support.

    Besa Deda, Chief Economist

    Ph: 02-8254-3251
     

    Attached Files:

    radson likes this.
  2. sash

    sash Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    15,544
    Location:
    Sydney
    Good post....the data is now showing the trend as that could take up to 18 months to establish....I see Sydney cooling....I agree with Melbourne the growth is driven by the Outer suburbs where immigrants are going...the inner city will follow Sydney.

    Brissie and Adelaide will now start moving...after many false starts. The stars will be Hobart and Canberra and even Geelong....
     
    Skilled_Migrant likes this.