The Victorian market outstripped Sydney's auction clearance rates last week... RBA raises Melbourne and Brisbane oversupply concerns...
Melbourne to overtake Sydney as Australia's top housing market
Melbourne is predicted to take Sydney's place as the best performing housing market, according to an article in The Australian.
The Victorian market outstripped Sydney's auction clearance rates last week, holding up as Sydney's dropped to an all-year low, Core Logic RP Data showed, with 66 percent of Sydney homes at auction finding a buyer.
Melbourne's performance is up compated to the same time last year with close to 1400 homes auctioned at a clearance rate of 73.4 per cent.
The change in performance between the two cities follows Westpac's hike in interest rates for owner occupiers, which many analysts expect will be mirrored by the other majors.
Economist Saul Eslake told The Australian, “These have contributed to a significant change in sentiment but I think that it’s too early to say anything more than that.
“Forecasts of imminent price declines are nothing new we’ve had those on a recurring basis since the global financial crisis,” he said.
Auctioneer Rodney Morley said, “Land is as hot as anything. For quality houses people are queuing up.”
RBA raises Melbourne and Brisbane oversupply concerns
The possible impact of oversupply in two of Australia’s biggest capital cities has again come to the fore.
In their Financial Stability Review, the Reserve Bank of Australia noted that some risks that have been present in the Australian housing market may have decreased as price growth slows in Melbourne and Sydney and investor demand for finance reduces.
“Recently there have been tentative signs of some slowing in the Sydney and Melbourne housing markets: auction clearance rates have fallen and price growth has eased in Sydney of late,” the RBA review said.
“Over recent months, lenders have announced changes to a range of price and non-price lending terms and conditions to strengthen lending practices and respond to supervisory expectations. Since then, there have been tentative signs that investor demand has started to cool.”
But while the risk posed by those factors may have minimised somewhat, the RBA still holds concerns about the level of construction spurred on by the price boom.
“While the housing market remains a long way from oversupply nationwide, some geographic areas appear to be reaching that point, particularly the inner-city areas of Melbourne and Brisbane,” the RBA said.
“Apartment approvals remain at very high levels in these areas, even though these rental markets already look soft; apartment prices have been little changed in the past year, rental vacancy rates are relatively high and growth in rents is subdued.”
While the RBA is concerned about Brisbane, Ian Hosking Richards, chief executive officer of Rocket Property Group, believes the RBA is being too broad.
“You need to take a closer look at what’s happening in the city, I don’t think it’s helpful that to say Brisbane is over supplied or Melbourne is over supplied,” Hosking Richards said.
“If you look at Brisbane, a suburb like Newstead probably has too many apartments coming online, but somewhere like Greenslopes, which is still in the inner-city, there is demand that is really outstripping supply,” he said.
Melbourne is predicted to take Sydney's place as the best performing housing market, according to an article in The Australian.
The Victorian market outstripped Sydney's auction clearance rates last week, holding up as Sydney's dropped to an all-year low, Core Logic RP Data showed, with 66 percent of Sydney homes at auction finding a buyer.
Melbourne's performance is up compated to the same time last year with close to 1400 homes auctioned at a clearance rate of 73.4 per cent.
The change in performance between the two cities follows Westpac's hike in interest rates for owner occupiers, which many analysts expect will be mirrored by the other majors.
Economist Saul Eslake told The Australian, “These have contributed to a significant change in sentiment but I think that it’s too early to say anything more than that.
“Forecasts of imminent price declines are nothing new we’ve had those on a recurring basis since the global financial crisis,” he said.
Auctioneer Rodney Morley said, “Land is as hot as anything. For quality houses people are queuing up.”
RBA raises Melbourne and Brisbane oversupply concerns
The possible impact of oversupply in two of Australia’s biggest capital cities has again come to the fore.
In their Financial Stability Review, the Reserve Bank of Australia noted that some risks that have been present in the Australian housing market may have decreased as price growth slows in Melbourne and Sydney and investor demand for finance reduces.
“Recently there have been tentative signs of some slowing in the Sydney and Melbourne housing markets: auction clearance rates have fallen and price growth has eased in Sydney of late,” the RBA review said.
“Over recent months, lenders have announced changes to a range of price and non-price lending terms and conditions to strengthen lending practices and respond to supervisory expectations. Since then, there have been tentative signs that investor demand has started to cool.”
But while the risk posed by those factors may have minimised somewhat, the RBA still holds concerns about the level of construction spurred on by the price boom.
“While the housing market remains a long way from oversupply nationwide, some geographic areas appear to be reaching that point, particularly the inner-city areas of Melbourne and Brisbane,” the RBA said.
“Apartment approvals remain at very high levels in these areas, even though these rental markets already look soft; apartment prices have been little changed in the past year, rental vacancy rates are relatively high and growth in rents is subdued.”
While the RBA is concerned about Brisbane, Ian Hosking Richards, chief executive officer of Rocket Property Group, believes the RBA is being too broad.
“You need to take a closer look at what’s happening in the city, I don’t think it’s helpful that to say Brisbane is over supplied or Melbourne is over supplied,” Hosking Richards said.
“If you look at Brisbane, a suburb like Newstead probably has too many apartments coming online, but somewhere like Greenslopes, which is still in the inner-city, there is demand that is really outstripping supply,” he said.
