On the one hand, housing prices are lagging behind
A 1.9 per cent drop in residential housing prices in May is the biggest slide since December in 2008, according to RP Data-Rismark's home value index. Melbourne fell hardest with a 3.6 per cent decline. Sydney is down 1.1 per cent. Adelaide and Brisbane lost 1.8 and 1.7 per cent respectively. (Someone, please, explain why Darwin was up by 5.5 per cent for the quarter.) Is the budget dragging things down? Is it consumer confidence? Read the full story here.
On the other hand, housing auctions keep ripping along
More than three thousand auctions this weekend concluded one of the busiest months for real estate on record. The national clearance rate of 68.3 percent improved slightly week-to-week but was down from about 72 per cent last year … on about 40 per cent fewer auctions last year. Sydney cleared 77.1 per cent of its sales, some of which were spectacular, like the Aqua apartment sale – 129 units at $1 million a pop, sold out in four hoursRead the full story here.
Let the debate continue: is this the end of the housing boom?
On the heels of the price sliding data, ABS notes that building construction approvals fell for the third consecutive month in April with a big drop in the volatile apartments category. The combination of the weak housing construction report and the price data whacked the Australian dollar by half a cent against the US dollar. "It's clear the level of building approvals has moved quite sharply lower in the past few months," said JP Morgan economist Tom Kennedy. "Coupled with the weak house price data, it would suggest that things are coming off the boil a little bit." Read the full story here.
Tell it to Melbourne, where construction schedules continue apace
Melbourne will see more than 1000 new apartments downtown – four towers in Footscray and another in Southbank – completely stealing the construction crown from Sydney. Nearly 4000 homes are slated for construction in greater Melbourne.Read the full story here.
Has the housing boom come at the expense of industry?
Of all the money lend in Australia’s markets, the share lent to businesses fell to its lowest level on record in April. Business’ share is half of what it was 25 years ago. Lenders have been choosing homeowners over shopowners. And 95 percent of additional money lent since 2012 has been lent for home mortgages. “Our collective short-sightedness and obsession with housing has left Australia increasingly vulnerable to international competition, while a lack of innovation and foresight means that we have failed to even recognise several emerging industries,” argues Callam Pickering. Read the full story here.