Two different banking systems
has shown how Australia's housing
market has been able to weather
the financial storm
The latest figures tracking the performance of the US housing market came out this week,
with the First American Core Logic House Price Index (HPI) release revealing US
housing prices fell 11.5 percent as of March ‘09 compared to
a year ago, a slight improvement from an 11.7 percent annual decline as of February.
Two trends are becoming evident in the US market: price declines are slowing
in the states that have had the highest declines over the past three years; however,
declines are accelerating in states that have been experiencing only moderate
decreases during that same period. Thirty-three states (out of fifty)
have exhibited acceleration in the rate of price declines in the last three months.
Since U.S. home prices peaked in July 2006, national home prices have declined
22.3 percent on a cumulative basis and are currently down to the lowest price
level in more than five years. Australian market values, in comparison, have been
exceptionally resilient.
The April figures for the RP Data-Rismark House Value Index will be released this week.
Based on last month’s figures (to March ’09) Australian property values increased
by 1.6 percent over the first three months of the year.
Overall, Australian dwelling values are just 2.5 percent or $11,800 lower than the
February 2008 peak.
Clearance rates in Australia’s auction markets have improved substantially
since the start of 2009. In Melbourne, Australia’s largest auction market,
clearance rates were averaging 60% during 2008. Over the past month
clearance rates have been around the 80% mark. In Sydney, auction clearance
rates have moved from a ‘08 average of 40% to consistently achieve 60% or greater since
the first week of February.
The total number of weekly listings has remained below the 12 month average
suggesting new stock additions are very controlled and
total stock on market has remained consistent suggesting a healthy rate of absorption.
Locally stock levels are very low with many agents reporting that they are
having difficulty replacing stock. Currently first home buyers are still snapping up
anything that is priced below $300,000. As time gets closer to October 31,
it will be interesting to see how the activity changes as the grant is wound back.