Weekly Real Estate Data
Sales decreased by 34% with Perth recording 645 transactions, down from 979 the week before. The rather large decline is being attributed to the latest coronavirus lockdown. The declines were spread relatively evenly amongst houses 33%, units 50% and vacant land 40%.
Listings are again trending upwards with 8,907 properties for sale this week. The 2% increase this week comes on the back of a consistent increase over the past three months as illustrated in the graph below. Last week we wrote that although listings are still low, there is an upwards trend as more sellers look at the current favourable market conditions with Perth recording a 16% increase over the past three months.
Perth recorded 2857 rental listings this week which is still nearly 50% lower than a year ago. However, there are some signs that investors are starting to re-emerge with investor finance increasing to $462 million in March 2021. This is nearly double the level of investment in March 2020, but still less than half previous highs of $1 billion a month. The increase in investors is sorely required to ease the historically low vacancy rates, which according to Domain, has led to Perth recording a 14.7% annual increase in rent, the highest of all capital cities.
April Property Price Growth
Although property prices did not increase at the same level as previous months, April was still a relatively strong month for growth with Perth recording 0.82% increase in property prices. This is the ninth consecutive month Perth has recorded positive property price growth. But as we can see in the graph below, there was a relatively sharp drop off in our trend of increasing prices. It is hard to gauge if the 3-day lockdown or Easter and ANZAC long weekends had an impact on prices. The other capital cities experienced greater price growths in April, so it would be fair to say that Easter and ANZAC weekends did not have a negative effect. However, even if Perth recorded 0.82% growth each month over a 12-month period, annual growth would still be over 10%.
Interest rates and Inflation.
The RBA left interest rates on hold which surprised nobody. Although the RBA said it was monitoring housing prices in their monetary statement, the main point of interest was they wanted lending standards to be maintained. This would indicate housing prices are not going to influence their decision regarding interest rates.
In case anyone has missed recent newsletters, the RBA have been constantly saying they will increase rates when inflation is consistently in the 2-3% target range. Last week the ABS released the March quarter inflation results revealing inflation rose by 0.6% for the quarter and 1.1% in annual terms. The updated graph below illustrates Australia is still a long way off consistently recording in the 2-3% range.
Reproduced with permission from:
in house economist from Michael Keil @ michaelkeil.com