Heat coming out of property market
A spate of negative data suggests the property market has well and truly come off the boil.
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.
Comparitively, in March house values had climbed 1.3 per cent and units climbed 1.4 per cent.
Property value growth aside, there are also other indicators which suggest the market is slowing.
“Housing finance commitments 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,” a statement by RP Data read.
“Given these results we anticipate that the rate of property value growth during May 2010 will once again 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.
“We also anticipate that our lead indicators such as vendor expectation error (discounting) and time on market will increase further due to the slower market conditions.”