Perth, Australia (PRWEB) April 19, 2013
Australia's property market posted a significant surge during the past month when the RP Data-Rismark Hedonic Home Value Index Results property report for March indicated a 2.8% rise in the dwelling values across the combined capital cities of the country. This growth indicates a 4.7% increase in the dwelling values since property prices fell in May of 2010.
With the exception of Adelaide, almost every capital city in Australia recorded gains. Among these cities, Perth is the frontrunner, recording a 3.4% increase in property values. Darwin and Hobart also posted significant gains in terms of property valuation as these cities posted increases of 2.5% and 2.4%, respectively.
This trend is consistent with quarterly reports which indicate a steady increase in dwelling values across Australia. One notable exception is the property market in Hobart which has not recorded a positive increase in property values.
“The March 2013 result is one of the strongest we’ve seen over the 3 years since March 2010. Not only were there no value falls recorded across the capital cities, but over the past 3 years, the all dwellings result of +1.32 per cent for the month was second only to the +1.40% increase observed in September 2012. Further, it was the strongest quarterly growth seen since the 3-month period ending May 2010,” Rismark International CEO Ben Skilbeck said.
RP Data Research Director Tim Lawless concurs with Skilbeck, noting that since the property market reached its peak in 2010 and made a subsequent downturn, the capital city housing markets have been making a steady recovery culminating with a 4.7% increase since the downturn.
"The most significant recoveries have been recorded across Darwin where values have risen 13.9% since bottoming out in January last year, and Perth where values are up 9.4% since the market trough in November 2011,” added Lawless.
Notable, too, is the increase in rental rates in Perth and Darwin, recording more than 10% growth year on year as compared to other capital cities.
Another significant aspect that is notable in the latest report is the robust performance of properties sales within the middle price range. According to the report, properties within the middle 60% of the housing market have registered an increase of 1.6% from last year up until February. In contrast, the most expensive properties experienced a 0.6% decline while the most affordable segment of the housing sector has registered a decrease of 0.9%.
Skilbeck attributes the strong performance of properties within the mid-price range to greater responsiveness of the investor segment of the housing sector compared to the owner occupier segment. It should be noted that the credit growth going back from 12 months since February has increased to 3.9% in the owner occupied segment compared to the 5.6% rise in the investor segment.
“With gross capital city unit rental yields now at 4.9%, and a number of short term fixed rate loans also being offered at these levels, it’s not surprising to see investors responding to these conditions more quickly than owner occupiers," Skilbeck added.
Apart from capital gains in housing market, other factors signal the continued recovery in the sector. Notable is the strong performance of both the auction market and private treaty indicators.
“Auction clearance rates haven’t been below 55% on any occasion so far this year, and over recent weeks the capital city weighted average clearance rate has been around the 60% mark with Melbourne and Sydney nudging the 70% mark. Additionally, vendors selling their homes by private treaty have been discounting their prices by a lesser amount in order to make a sale. The average selling time was consistently shortening prior to the Christmas/New Year slow down,” Lawless divulged.