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Housing market reportCapital city market report

Prepared February 2014

Dr Andrew Wilson, Senior Economist Australian Property Monitors

2

Commentary provided by Dr. Andrew Wilson, Senior Economist Australian Property Monitors 1300 799 109 | domain.com.au

Year off to a flying start as economic outlook improves

With the Reserve Bank signalling an improved outlook for the economy together with falling mortgage interest rates, the current, once in a decade energy of the Sydney housing market is set to continue. Other markets are also set to benefit from improved affordability from lower rates, although prices growth will be more modest.

Higher retail sales, a positive trade balance from a lower dollar and rising business confidence have provided some optimism on the short-term outlook for the economy. The key measure, however, remains the jobless rate with both New South Wales and Victoria reporting a significant loss of jobs over 2013. Interest rates will remain on hold for the foreseeable future on the proviso that the national unemployment rate remains consistently below 6 percent.

2013 was the strongest year for national house price growth since 2009 with the median house price increasing by 9.8 percent. All capital cities recorded an increase in median house prices over the calendar year for the first time in four years.

Solid end of year buyer momentum in all markets will ensure a positive start to 2014 - signs of which are already emerging. Affordability constraints and likely continued subdued economic activity will, however, act to moderate prices growth through the year.

Australian capital city housing markets are providing early indications that the solid to strong buyer activity that characterised most capitals through 2013 – particularly through the latter part of the year - is set to continue at least through to the middle of 2014.

Sydney and Melbourne have each recorded strong weekend auction clearance rates over February well ahead of the results recorded over the same period in 2013.

Auction listings have surged over February to record late-summer levels as market confidence remains on a high.

The Sydney market as yet shows no sign of slowing down from the near-record prices growth recorded over the December quarter 2013. The Melbourne market will be fully tested with high auction numbers prior to the Labour Day holiday weekend set to reveal the underlying level of buyer demand. Challenges remain, however, for Melbourne with significant concerns over the performance of the local economy and emerging political instability.

Low interest rates are a key ingredient to the current high levels of home buyer activity. Although the Reserve Bank unsurprisingly decided to keep official interest rates on hold at its first meeting for the year, mortgage rates continue to fall as banks increasingly compete for market share.

National overview

source: APM

Houses

Units

$300k

$400k

$500k

$600k

Jun

06

Dec

06

Jun

07

Dec

07

Jun

08

Dec

08

Jun

09

Dec

09

Jun

10

Dec

10

Jun

11

Dec

11

Jun

12

Dec

12

Jun

13

Dec

13

Median prices, national Yearly median price growth, Top 10, Dec Qtr ‘13

Brisbane Houses

Hobart Houses

Melbourne Units

Darwin Houses

Perth Houses

Darwin Units

Melbourne Houses

Perth Units

Sydney Units

Sydney Houses 15.1%

10.9%

9.3%

8.6%

8.4%

8.4%

6.9%

6.8%

5.1%

5.0%

2.9%

-1.1%

-2.4%

3.6%

0.2%

6.2%

-3.3%

1.9%Change since last month

-1.8%

-1.6%

HousesDec 2013 Quarterly change Yearly change

Sydney $763,169 6.0% 15.1%

Melbourne $568,824 3.2% 8.6%

Brisbane $461,638 2.1% 5.0%

Adelaide $446,153 1.7% 2.8%

Perth $605,856 1.8% 8.4%

Canberra $588,242 2.3% 3.0%

Gold Coast $480,000 0.9% 3.2%

National $597,556 3.7% 9.8%

Median prices: 3 months to end December 2013

UnitsDec 2013 Quarterly change Yearly change

$541,992 4.3% 10.9%

$421,759 3.1% 6.8%

$361,211 -1.5% 0.4%

$282,836 0.5% 0.3%

$406,196 3.7% 9.3%

$419,675 -0.7% 1.1%

$254,937 -1.4% 1.5%

$458,906 3.1% 8.0%

Housing market report

National - February 2014

source: APM

3


Sydney | February 2014

QoQ: Quarter on quarter change in median price. YoY: Year on year change in median price. Current period is 3 months to end of December 2013.

WestQoQ: +8.3%YoY: +16.9%


Upper NorthQoQ: +11.1%YoY: +21.1%

Upper NorthQoQ: +1.8%YoY: +5.5%

Northern BeachesQoQ: +8.2%YoY: +15.5%

Northern BeachesQoQ: +2.7%YoY: +8.6%

Lower NorthQoQ: +4.1%YoY: +14.8%

Lower NorthQoQ: +0.9%YoY: +15.2%Can-

BankstownQoQ: +6.8%YoY: +14.7%

Can- BankstownQoQ: +3.3%YoY: +9.9%

Inner WestQoQ: +5.9%YoY: +20.0%

Inner WestQoQ: +3.1%YoY: +9.9%

SouthQoQ: +6.9%YoY: +14.0%


City & EastQoQ: +6.9%YoY: +16.3%

City & EastQoQ: +0.9%YoY: +8.7%

South WestQoQ: +2.9%YoY: +11.9%


Median price change by region (units)Median price change by region (houses)

Quick statsAverage days on market

Average discount

Stock on market

70

5.1%

19k

93

5.8%

-24.3%

6.0%

-35.2%

78Jan 2014

Jan 2014

Jan 2014

12 months ago

12 months ago

Change 12 months ago

Long-termtrend

Long-termtrend

Change long-termtrend

Sydney

* January has been excluded due to low number of auctions

40%

50%

60%

70%

80%

Jun

06

Dec

06

Jun

07

Dec

07

Jun

08

Dec

08

Jun

09

Dec

09

Jun

10

Dec

10

Jun

11

Dec

11

Jun

12

Dec

12

Jun

13

Dec

13

Auction clearance rates, Sydney*

Houses

Units

$300k

$400k

$500k

$600k

$700k

$800k

Jun

06

Dec

06

Jun

07

Dec

07

Jun

08

Dec

08

Jun

09

Dec

09

Jun

10

Dec

10

Jun

11

Dec

11

Jun

12

Dec

12

Jun

13

Dec

13

Median prices, Sydney

source: APM

The Sydney housing market was a significant contributor to national house prices growth in 2013.

Sydney’s median house price increased by an exceptional 6 percent over the December quarter which is the second highest quarterly increase in house prices on record. Sydney house prices surged by 15.1 percent over 2013 which was the strongest rise over a calendar year prices since 2003.

Sydney’s median house price increased by over $100,000 through 2013 to a new record high of $763,169. Sydney unit prices also performed strongly over 2013 increasing by 10.9 percent to $541,992 - also a record.

Strong changeover buyer activity in the inner west and the upper north shore were significant contributors to overall prices growth over the second half of 2013, together with record levels of investor activity particularly in the west.

Strong buyer activity is set to continue in Sydney early in 2014, although the 2013 rates of growth will be unsustainable over the full year.


Sydney - February 2014

4



Average discount

Stock on market

100

6.1%

38k

113

7.2%

-0.5%

6.5%

8.5%

77Jan 2014

Jan 2014

Jan 2014

12 months ago

12 months ago


Long-termtrend

Long-termtrend


Melbourne


North EastQoQ: +10.3%YoY: +12.2%

North EastQoQ: +9.9%YoY: +9.9%

Inner EastQoQ: +2.2%YoY: +12.4%

Inner EastQoQ: +4.4%YoY: +11.3%

Outer EastQoQ: +10.7%YoY: +21.6%

Outer EastQoQ: +14.1%YoY: +20.5%

InnerQoQ: +12.3%YoY: +7.4%

Inner QoQ: +2.3%YoY: +4.7%


WestQoQ: -1.2%YoY: -0.7%

NorthQoQ: +5.8%YoY: +10.8%

NorthQoQ: 2.2%YoY: +1.0%

South EastQoQ: +2.5%YoY: +6.6%


Inner SouthQoQ: +6.3%YoY: +15.8%

Inner SouthQoQ: +11.1%YoY: +16.1%

Median price change by region (houses) Median price change by region (units)

Auction clearance rates, Melbourne*

Houses

Units

$200k

$300k

$400k

$500k

$600k

Jun

06

Dec

06

Jun

07

Dec

07

Jun

08

Dec

08

Jun

09

Dec

09

Jun

10

Dec

10

Jun

11

Dec

11

Jun

12

Dec

12

Jun

13

Dec

1340%

50%

60%

70%

80%

90%

Jun

06

Dec

06

Jun

07

Dec

07

Jun

08

Dec

08

Jun

09

Dec

09

Jun

10

Dec

10

Jun

11

Dec

11

Jun

12

Dec

12

Jun

13

Dec

13

Median prices, Melbourne

* January has been excluded due to low number of auctions source: APM

Melbourne house prices increased solidly over the December quarter, rising by 3.2 percent, with unit prices increasing similarly by 3.1 percent over 2013. Melbourne house prices were the second-best performers behind, Sydney increasing by 8.6 percent to a new peak of $568,824.

Melbourne’s inner-east prestige market and the outer east mid-price range markets were the best performers over 2013. Early signs are of continued solid buyer activity in these regions, with each reporting strong weekend auction clearance rates early in February.

Challenges remain for the Melbourne market in 2014 with declining local economic activity providing a significant headwind to sustained prices growth despite restored confidence and low interest rates.


Melbourne - February 2014

5



Average discount

Stock on market

105

6.0%

26k

128

7.6%

3.7%

7.6%

4.0%

103Jan 2014

Jan 2014

Jan 2014

12 months ago

12 months ago


Long-termtrend

Long-termtrend


Brisbane

Syd

Mel

b

Bris

Ade Per

Can Dar

Hob Nat

0

1

2

3

4

5

6

7

8

9

6.06.6

7.36.9

5.1

4.2 4.3

8.3

6.4

Unemployment rate by city, Jan 2014

Houses

Units

$200k

$300k

$400k

$500kJu

n 06

Dec

06

Jun

07

Dec

07

Jun

08

Dec

08

Jun

09

Dec

09

Jun

10

Dec

10

Jun

11

Dec

11

Jun

12

Dec

12

Jun

13

Dec

13

Median prices, Brisbane

source: APMsource: ABS

The Brisbane housing market continues its steady revival with the median house price increasing by 2.1 percent over the December quarter, the best quarterly result in four years. House prices increased by 5 percent over 2013, with unit prices however up by just 0.4 percent. Brisbane house prices are now just 2.2 percent below the previous price peak of June 2010 and closing fast.

An improving economy and increased activity from investors are set to accelerate prices growth in Brisbane through 2014 above the levels recorded in 2013.


CabooltureQoQ: -1.4%YoY: -1.1%

CabooltureQoQ: -13.5%YoY: -13.5%

NW InnerQoQ: +2.7%YoY: +6.1%

NW InnerQoQ: 0.0%YoY: -1.3%



NW Outer QoQ: +2.9%YoY: +4.1%

Pine RiversQoQ: +3.2%YoY: +2.8%

Pine RiversQoQ: -1.5%YoY: -4.3%

RedlandQoQ: +1.6%YoY: +1.4%

RedlandQoQ: -1.3%YoY: -4.5%

LoganQoQ: -1.1%YoY: +1.8%

SE InnerQoQ: +3.9%YoY: +11.2%

SE InnerQoQ: -5.9%YoY: +0.3%

SE OuterQoQ: +3.0%YoY: +5.3%

SE OuterQoQ: -3.5%YoY: -6.2%

NW OuterQoQ: -2.9%YoY: -0.8%

IpswichQoQ: +1.1%YoY: +3.9%

IpswichQoQ: -6.0%YoY: -23.9%


LoganQoQ: -12.5%YoY: -34.4%


Brisbane - February 2014

6


Adelaide | February 2014


NorthQoQ: -1.0%YoY: +0.6%

NorthQoQ: -5.5%YoY: -6.0%

EastQoQ: +4.0%YoY: +4.2%

EastQoQ: -2.1%YoY: -0.2%


WestQoQ: -3.7%YoY: -5.4%





Average discount

Stock on market

111

6.3%

11k

132

7.1%

-8.1%

6.8%

-0.8%

119Jan 2014

Jan 2014

Jan 2014

12 months ago

12 months ago


Long-termtrend

Long-termtrend


Adelaide

2%

3%

4%

5%

6%

7%

8%

9%

10%

Jan

09

Jul 0

9

Jan

10

Jul 1

0

Jan

11

Jul 1

1

Jan

12

Jul 1

2

Jan

13

Jul 1

3

Jan

14

Adelaide unemployment rate

Houses

Units

$100k

$200k

$300k

$400k

$500k

Jun

06

Dec

06

Jun

07

Dec

07

Jun

08

Dec

08

Jun

09

Dec

09

Jun

10

Dec

10

Jun

11

Dec

11

Jun

12

Dec

12

Jun

13

Dec

13

Median prices, Adelaide


Adelaide is showing positive signs of sustained recovery in house prices with the December quarter median increasing by 1.7 percent – the third consecutive quarterly rise. Adelaide house prices rose by 2.8 percent over 2013 while unit prices increased by just 0.3 percent. The Adelaide median house price remains the lowest of all the mainland capitals at $446,153.

The Adelaide housing market price cycle is typically less volatile than other capitals. Although significant challenges remain for the underperforming local economy, low interest rates, increased confidence and the lowest median house price of all the mainland capitals should ensure that last year’s rising buyer activity will be sustained over 2014 albeit at typically modest levels.


Adelaide - February 2014

7


The Perth housing market recorded another solid year in 2013 with median house prices increasing by 8.4 percent and unit prices up strongly by 9.3 percent. Prices growth resumed over the December quarter after signs emerged of the market plateauing during the previous September quarter. House prices increased by 1.8 percent over the quarter with unit prices up sharply by 3.7 percent.

Perth has now recorded eight consecutive quarters of house price growth and six consecutive quarters of unit price growth. Perth’s median unit price exceeded $400,000 for the first time at $406,196.

The Perth market continues to provide a balance of market activity from buyer types with the highest proportion of first home buyers of all the state capitals. Rising demand, price rises and low interest rates have been the catalyst for a surge in home building over the second half the year with ABS dwelling approvals up 17.3 percent.

A continuing strong local economic performance will ensure that the solid prices growth recorded over 2013 in Perth should be maintained through 2014.


Average discount

Stock on market

94

5.3%

22k

91

5.3%

-1.6%

7.0%

2.5%

98Jan 2014

Jan 2014

Jan 2014

12 months ago

12 months ago


Long-termtrend

Long-termtrend


Perth

source: APM

Perth

National

$350

$400

$450

$500

$550

Sep

09

Dec

09

Mar

10

Jun

10

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Jun

13

Sep

13

Dec

13

Median weekly asking rent, houses December 2013

Houses

Units

$200k

$300k

$400k

$500k

$600k

Jun

06

Dec

06

Jun

07

Dec

07

Jun

08

Dec

08

Jun

09

Dec

09

Jun

10

Dec

10

Jun

11

Dec

11

Jun

12

Dec

12

Jun

13

Dec

13

Median prices, Perth

source: APM


CentralQoQ: +8.1%YoY: +3.9%


EastQoQ: 1.2%YoY: +7.6%




CentralQoQ: +16.0%YoY: +10.1%


EastQoQ: +4.7%YoY: +3.1%



Perth - February 2014


8


The volatile Canberra housing market finished the year positively recording a solid increase in the median house price of 2.3 percent to $588,242. This followed a fall of -0.9 percent over the previous September quarter. Unit prices however fell by -0.7 percent over the quarter. Canberra house prices increased by 3 percent over 2013 with unit prices up by 1.1 percent.

The Canberra market remains exposed to the opposing forces of an underlying chronic shortage of housing and the prospect of ongoing job shedding in the public service – a significant contributor to the local economy.

Recent strong increases in local dwelling construction are a positive for housing market activity with modest prices growth expected again in 2014.


Average discount

Stock on market

97

5.6%

1.7k

88

4.5%

-2.4%

4.8%

17.7%

73Jan 2014

Jan 2014

Jan 2014

12 months ago

12 months ago


Long-termtrend

Long-termtrend


Canberra


BelconnenQoQ: +2.4%YoY: +1.3%

BelconnenQoQ: +3.8%YoY: +4.5%

GungahlinQoQ: -2.8%YoY: +0.2%

GungahlinQoQ: +6.4%YoY: +15.3%



SouthQoQ: +5.6%YoY: -6.2%

SouthQoQ: +9.4%YoY: -5.8%

Woden ValleyQoQ: +1.2%YoY: -6.0%

Woden ValleyQoQ: -6.8%YoY: -5.7%

TuggeranongQoQ: +4.3%YoY: +3.2

TuggeranongQoQ: -1.3%YoY: -2.9%


Canberra unemployment rate Median prices, Canberra

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

Jan

09

Jul 0

9

Jan

10

Jul 1

0

Jan

11

Jul 1

1

Jan

12

Jul 1

2

Jan

13

Jul 1

3

Jan

14

Houses

Units

$200k

$300k

$400k

$500k

$600k

Jun

06

Dec

06

Jun

07

Dec

07

Jun

08

Dec

08

Jun

09

Dec

09

Jun

10

Dec

10

Jun

11

Dec

11

Jun

12

Dec

12

Jun

13

Dec

13



Canberra - February 2014



Average discount

Stock on market

138

7.1%

10k

175

9.9%

-3.5%

9.8%

-13.4%

142Jan 2014

Jan 2014

Jan 2014

12 months ago

12 months ago


Long-termtrend

Long-termtrend


The Gold Coast housing market continues to provide positive signs that recent increases in buyer activity and prices growth is consolidating.

Gold Coast house prices increased by 0.9 percent over the December quarter to be up by 3.2 percent over the year. The unit market is also showing signs of stabilising, with prices rising by 1.5 percent – the first annual increase since 2009.

Rising buyer and seller confidence and a strengthening local economy will ensure that the Gold Coast housing market continues to improve in 2014, with prices growth likely to exceed the 2013 results for both houses and units.

Gold Coast


Gold Coast WestQoQ: -1.4%YoY: +1.4%

Gold Coast EastQoQ: -2.4%YoY: -0.9%

Gold Coast WestQoQ: +2.8%YoY: +5.8%

Gold Coast EastQoQ: +2.2%YoY: +4.4%


60

80

100

120

140

160

180

200

Jul 0

6

Jan

07

Jul 0

7

Jan

08

Jul 0

8

Jan

09

Jul 0

9

Jan

10

Jul 1

0

Jan

11

Jul 1

1

Jan

12

Jul 1

2

Jan

13

Jul 1

3

Jan

14

Average days on market, Gold Coast

Houses

Units

$200k

$300k

$400k

$500k

$600k

Jun

06

Dec

06

Jun

07

Dec

07

Jun

08

Dec

08

Jun

09

Dec

09

Jun

10

Dec

10

Jun

11

Dec

11

Jun

12

Dec

12

Jun

13

Dec

13

Median prices, Gold Coast

source: APM


Gold Coast - February 2014

10


The Hobart market continues on the path to recovery with median house prices increasing solidly by 2.8 percent over the December quarter – the third consecutive rise and the best quarterly result for four years. Hobart’s median house price increased by a solid 5.1 percent over 2013 but remains -4.1 percent below the previous price peak recorded three years ago.

Local economic performance remains a constraint for the Hobart market but buyer and seller confidence is certainly rising. The prospects are positive that recent house prices growth will continue into 2014.

Data contained in this report is subject to revision as a result of time lags with the reporting and collection of sales transaction

data. This monthly housing market report is produced for and used by both APM and Domain. Copyright APM Pty Limited.

House price growth in Darwin flattened over the December quarter with the median house increasing by just 0.8 percent and a steady result for the median unit price. House prices however rose by 6.9 percent over 2013 with unit prices up by 8.4 percent.

A solid local economy with strong jobs growth driven by the resources sector and an underlying shortage of housing will ensure that prices in Darwin will continue to rise through 2014.

Hobart Darwin

Disclaimers

APM Disclaimer

Published and compiled by Australian Property Monitors ACN 061438006. Level 2, 1 Darling Island Road Pyrmont NSW 2009.

In compiling this publication, the Publisher relies upon information supplied by a number of external sources. The publication is supplied on the basis that while the Publisher believes all the information in it will be correct at the time of publication, it does not warrant its accuracy or completeness and to the full extent allowed by law excludes liability in contract, tort or otherwise, for any loss or damage sustained by subscribers, or by any other person or body corporate arising from or in connection with the supply or use of the whole or any part of the information in this publication through any cause whatsoever and limits any liability it may have to the amount paid to the Publisher for the supply of such information.

New South Wales Land and Property Information

Contains property sales information provided under licence from the Land and Property Information. Australian Property Monitors Pty Ltd is authorised as a Sales Information Provider by the Land and Property Information.

State of Victoria

To the extent that this report has been developed using information owned by the State of Victoria, the State of Victoria owns the copyright in the Property Sales Data which constitutes the basis of this report and reproduction of that data in any way without the consent of the State of Victoria will constitute a breach of the Copyright Act 1968 (Cth). The State of Victoria does not warrant the accuracy or completeness of the information contained in this report and any person using or relying upon such information does so on the basis that the State of Victoria accepts no responsibility or liability whatsoever for any errors, faults, defects or omissions in the information supplied.

State of Queensland

Based on or contains data provided by the State of Queensland (Department of Environment and Resource Management) [2013]. In consideration of the State permitting use of this data you acknowledge and agree that the State gives no warranty in relation to the data (including accuracy, reliability, completeness, currency or suitability) and accepts no liability (including without limitation, liability in negligence) for any loss, damage or costs (including consequential damage) relating to any use of the data. Data must not be used for direct marketing or be used in breach of the privacy laws.

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Warning

The information contained in this dataset is extracted from records of land status and cadastral boundary definition held by the Government of South

Australia (the ‘State’). The information is not represented to be accurate, current, complete, or suitable for any purpose, at the time of its supply by the State, and may have changed since the date of supply by the State. The software by which the information is provided is not represented to be error free. No responsibility is accepted by the State for any reliance placed by any person upon the information, or the software by which it is provided. Persons acquiring or using the information and its associated software must exercise their independent judgement in doing so.

Copyright

Copyright in the information remains with the Crown in right of the State of South Australia. The information is reproduced under licence from the Crown.

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The information contained in this dataset must not be used for the purposes of compiling contact lists, whether personalised or not.

Crown in Right of Tasmania

This product incorporates data that is copyright owned by the Crown in Right of Tasmania. The data has been used in the product with the permission of the Crown in Right of Tasmania. The Crown in Right of Tasmania and its employee and agents:

a. give no warranty regarding the data’s accuracy, completeness, currency, or suitability for any particular purpose

b. do not accept liability howsoever arising including but not limited to negligence for any loss resulting from the use of or reliance upon the data.

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The Territory Data is the property of the Australian Capital Territory. No part of it may in any form or by any means (electronic, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior permission. Enquiries should be directed to: The Executive Director, ACT Planning and Land Management, GPO Box 1908, Canberra, ACT 2601.

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Copyright in the underlying data for the Northern Territory is owned by the Northern Territory of Australia represented by the Department of Infrastructure, Planning and Environment for which no responsibility is accepted.

Western Australian Land Information Authority (Landgate)

Western Australian Land Information Authority (2013) trading as Landgate. Based on information provided by and with the permission of the Western Australian Land Information Authority (2013) trading as Landgate.


Hobart and Darwin - February 2014

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