Based on all indicators coming  from the Australian Property Market – demand is beginning to slow and clearance rates are nowhere near where they were a couple of months back. According to RP Data’s Rismark Home Value Index, residential market activity has slowed significantly in the last few months.

In April, house values in the capital cities increased by just 0.1 per cent, while unit values increased by 0.5 per cent. Whereas  in March house values had climbed 1.3 per cent and units climbed 1.4 per cent.

There are other indicators excluding property prices to suggest that demand is down. Home Loan Numbers is one such indicator. Mortgage numbers continue to fall, as does consumer sentiment, interest rates are 150 basis points higher than their recent lows, dwelling approvals fell by 14.8 per cent during April and auction clearance rates continue to trend down.

Given the market results it is likely that the rate of property value growth during May 2010 will  be soft and this trend is likely to continue until at least the time of the spring selling season when market activity historically begins to rebound. Certainly vendor expectation error (discounting) and time on market will increase further due to the slower market conditions.

Categories: Property

Comments are closed.