The big property news this week… RP Data’s release of the first quarter figures and the RBA’s smart decision to keep interest rates on hold for a little while longer.
There were certainly a lot of property owners breathing a sigh of relief when the announcement of a stay to the cash rate came through on Tuesday. No rushed rise by the Reserve Bank board, despite last week’s higher than expected inflation figures, is a win for the property market. It’s provided another pocket of opportunity to bring down stock levels and improve the housing supply/demand imbalance we’re currently experiencing.
Nationally the number of homes for sale is nearly 30% higher than at the same time last year, according to the newly released March Quarter results from RP Data.
The results paint a realistic, but far from rosy picture. While the rental sector is seeing a gradual improvement in weekly rates, dwelling values recorded a fall in each capital city with the overall average recording a softening of 2.1%.
Annually, to March 2011, Sydney was the highest performer with an increase of 2.1% while at the other end of the scale, Brisbane saw a decline in values of 6.8%.
As always Adelaide has skirted through the peaks and troughs a little better than most. Property values recorded a quarterly decline of 1.6% and a stable past 12 months with 0% change.
Whichever way you look at it, the market is in a partial state of limbo.
The significant drop in first home owners looking to buy property, is causing those selling homes at entry level to step into the next price bracket at a much slower rate than previously experienced. This has created a noticeable stalemate in both the low to middle ends of the market right now, however a change is inevitable.
“With first time buyers now representing a bit less than 15% of all owner occupier housing finance commitments, it is likely that market activity in the first-time buyer market will increase in the medium term,” according to RP Data’s Research Director Tim Lawless.
From what we’re seeing on the frontlines, the news gets a little better. At the Top End of the market it’s far from doom and gloom.
This area has remained out of reach of the first home buyer impact. In fact we’re seeing some great results, with beautiful homes that are priced right being snapped up in a matter of weeks!
We spoke further about the state of the market with RP Data’s Research Analyst Cameron Kusher on Wednesday’s episode of Toop.TV. To hear what he had to say go to Episode 77 at www.toop.tv.
Adelaide tends to avoid the extreme highs and lows of the market, and while that may seem boring to hard-line investors, we actually think we’re lucky.
Sometimes ‘Boring is Beautiful’.Mandy Wurth, General Manager
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