Melbourne Mortgage and Property News

27.07.16 | Marc Barlow | News

Weekly Wrap – week ending 24 July


If there were a phrase to sum up last week, it would probably be ‘steady as she goes’. Sure, we’ve had a few stormy weeks with forecasts of potential economic tornadoes but while the skies are still cloudy, the threat of imminent disaster has dissipated. In fact, if the economy were a ship it has remained on course throughout.


As has the auction market with REIV ( reporting a steady clearance rate of 73% or 455 houses sold last weekend. This is down from a 78% clearance rate last weekend and 77% for this weekend last year.

House prices – return to growth for most capital cities

The Domain House Price Report for the June quarter (, released this week, shows that nationally house prices have return to growth, but it is a mixed bag of results.


House prices dipped last quarter, leading to much speculation in the media, but have returned to growth figures for all capital cities except Perth and Darwin. Improved consumer confidence and low interest rates are driving the return to growth.


Melbourne and Sydney continue to show steady activity and in both cities median house prices. Melbourne’s median house price rose 1.5% to $740,995 and Sydney’s median house price rose 2.4% to $1,021,968.


The report also highlights how Australia’s other capital cities are increasingly attracting investors and first homebuyers due to their affordability and growth forecast.


Australia’s capital city is the best example of this. Long overshadowed by Melbourne and Sydney, Canberra is coming into its own in many ways. It was the top performer with median house price jumping 3.1% to $654,306.


Hobart remains Australia’s most affordable capital city, albeit one that is on the rise. House prices increased there by 0.3% last quarter to $345,880. Adelaide saw house prices increase by 0.9% to $498,927 although unit prices were down by 1.7%.


Perth and Darwin were the exception to the rule. Both cities have seen prices decrease as temporary workers leave following the downturn in the mining industry. Darwin house prices dropped 0.7% to $613,590 and Perth 1.7% to $568,132.


Rental returns – good news for investors and some relief for tenants


This week Domain also released its rental report for the June quarter ( ). And again, while on the whole vacancy rates remain tight in most capital cities, some have seen falls. Rental yields across the nation have also held fairly steady.


Hobart and Canberra were also the top performers in terms of rental yields for investors, with Canberra in particular seeing solid growth in rental prices. These results highlight the potential of these cities for investors.


Sydney continues its trend of offering lowest returns nationally, although unit rents rose steadily. In fact unit rents are fast approaching that of houses.


Brisbane, Adelaide, Perth and Darwin all saw rental prices drop offering relief to tenants. As expected, the falls were steepest in Perth and Darwin for the same reasons that house prices fell.


So returning to our ship metaphor, the property market is pretty much chartering the expected course. And with all bets on an interest rate cut before the end of the year, there is no reason to expect a change in course in the foreseeable future.