Property Research

The auction clearance rate for April was 67 per cent. There were 2,380 homes offered at auction with 1,590 selling.

The highest clearance rates were recorded in Thornbury (96 per cent), Highett (85 per cent), Bundoora (82 per cent), Bentleigh East (79 per cent) and Elsternwick (79 per cent).

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The total number of building approvals in Victoria declined by 9.1 per cent in March 2013 in seasonally adjusted terms. This months’ results remain below the five-year average of 4,300 approvals per month and is also 2.2 per cent lower than this time last year. The mild recovery in the housing market over the past few months has not translated to an increase in building activity suggesting that the high levels of dwelling completions over the past three years has resulted in more adequate levels of supply. The recent state government announcement to increase the First Home Owner Grant to $10,000 for new homes (and removing assistance for existing homes) could see an increase in building activity in the coming months.

The March 2013 quarter house price index for the weighted average of the eight capital cities remained relatively stable, increasing by a slight 0.1 per cent to 146. This reflected a 2.6 per cent increase over the year. In Melbourne, the house price index increased slightly by 0.2 per cent over the quarter resulting in an increase of 1.1 per cent over the year. This increase supports the positive increase in the REIV’s March quarter median house prices (in seasonally adjusted and trend terms). However, the difference in the headline figures is a result of different methodologies employed by the ABS and the REIV.

In March 2013, housing finance commitments in Victoria increased by 9.4 per cent from the previous month in original terms and by 5.2 per cent in seasonally adjusted terms. The share of home loans to first home buyers increased slightly to 17.7 per cent in March 2013 which is to be expected as the State Revenue Office recorded a six per cent increase in the number of First Home Owners Grants given in the month. The number of grants given provides a good forward indicator of the share of home loans issued to first home buyers in the month.

In March 2013, the total value of Australia’s owner-occupied housing commitments (excluding alterations and additions) increased strongly by 5.8 per cent in seasonally adjusted terms. This is the largest monthly increase since a 9.5 per cent increase in March 2009 and also translated to a 1.1 per cent increase in trend terms. Commercial finance, which includes the construction or purchase of dwellings for investment purposes, increased by 1.5 per cent in the month in seasonally adjusted terms although it decreased by 1.1 per cent in trend terms. Both owner-occupied housing and investment housing (excluding refinancing) are above what they were a year ago with investment housing being up 18.5 per cent and 21.3 per cent respectively.