Go Figure – Making sense out of the real estate data

There has certainly been plenty of data released in the past weeks which show how the real estate market has performed over the last year and where it may be headed over the coming 12 months.

The Reserve Bank of Australia has decided to leave the cash rate unchanged at 4.5 per cent at its monetary policy meeting.

Australia’s labour market has continued to perform well as May 2010 employment data showed that the national unemployment rate dropped to 5.2 per cent from 5.4 per cent, with the participation rate falling slightly from 65.2 per cent to 65.1 per cent.  Victorian unemployment increased slightly for the month to 5.4 per cent from last month’s 5.3 per cent, as the participation rate increased from 65.0 per cent to 65.2 per cent.  The strong higher demand for workers in our already strong labour market could put upward pressure on interest rates in the months to come.

The Australian and Victorian housing markets have continued their strong performance this year. The Melbourne auction market had a clearance rate of 68 per cent in June and a clearance rate of 76 per cent for the calendar year so far.  There have now been over 14,800 homes sold by auction, almost twice as many as last year and 11 per cent more than the previous high in 2007.   June 2010 had more auctions on a winter weekend than ever before, with over 1050 properties going to auction.

The number of total dwelling units approved in Victoria decreased by 3.0 per cent in seasonally adjusted terms for the month of May 2010, following a revised decrease of 15.2 per cent in the previous month.  The value of total dwelling units approved in Victoria increased by 11.7 per cent to $1.4 billion dollars.  In trend terms, the number of total units approved in Victoria decreased by 2.8 per cent for the month while the value of total dwelling units approved fell by 0.8 per cent.

Housing Affordability in Victoria has decreased in the December quarter.  The proportion of income required to meet monthly loan repayments has increased from 28.2 per cent to 29.5 per cent over the quarter.  The average monthly home loan repayment has increased by 8.4 per cent for the quarter while the median weekly family income has increased by only 3.3 per cent.  Supply issues need to be addressed as soon as possible for affordability to improve.

The total value of owner–occupied housing commitments, excluding alterations and additions, for April 2010 decreased 2.4 per cent in trend terms, which is now the tenth consecutive decrease.  In seasonally adjusted terms, the total value of owner–occupied housing commitments increased by 0.6 per cent.   The total value of commercial finance increased in trend terms by 5.6 per cent and increased by 2.8 per cent in seasonally adjusted terms.  The value of total personal finance commitments decreased in trend terms by 0.6 per cent and decreased by 0.5 per cent in seasonally adjusted terms.

The Metropolitan Melbourne rental market eased slightly in May 2010, with a vacancy rate of 1.7 per cent up from last month’s 1.6 per cent.  The inner-Melbourne rate remained unchanged at 1.6 per cent.  The middle-Melbourne rate eased from 1.6 per cent to 2.0 per cent, while the outer-Melbourne rate also eased to 1.3 per cent from 1.1 per cent last month.

Most Changing places real estate agents are still experiencing strong demand from investors, as vacancy rates remain very low. And whilst the real estate sales market is weakening at the top end the middle range is still very strong. If you are considering selling you can still expect to achieve a good result and be sure to take advantage of our flat fees which could save you thousands of dollars.