Housing approvals bounce but remain ‘well below’ trend

Dwelling approvals have recovered slightly but remain 29 per cent lower year-on-year, according to the latest ABS statistics.

The latest Dwelling Approvals data from the Australian Bureau of Statistics (ABS) has revealed that, in seasonally adjusted terms, total building approvals rose by 2.5 per cent in January, following a 8.1 per cent drop in December 2018.

The uptick in residential dwelling approvals was driven by a 3.8 per cent increase in unit approvals (from an 18.7 per cent fall in December), and a 1.9 per cent increase in house approvals (from a 1.7 per cent decline).

In its analysis of the data, ANZ Research observed: “The overall trend in approvals remains soft, but it is slightly encouraging that the pace of declines at the end of 2018 hasn’t continued.”

However, ANZ Research noted that the number of approvals remains “well below” the annual trend, with total dwelling approvals down 29 per cent year-on-year.

On a state-by-state basis, Western Australia reported the sharpest rise in approvals, up 29 per cent month-on-month, with unit approvals up 184 per cent, while house approvals rose 3 per cent.

NSW also reported a strong rise in dwelling approvals, which rose by 12 per cent month-on-month, led by a 18 per cent increase in unit approvals and a 7 per cent rise in detached housing approvals.

Conversely, the downward trend in approvals across Victoria continued with an 8 per cent fall in January, spurred by a 22 per cent decline in unit approvals and a 2 per cent drop in house approvals.

Total approvals also dropped in Queensland, falling for the seventh consecutive month down 4 per cent, with unit approvals declining by 8 per cent and house approvals falling by 2 per cent.

South Australia also reported a drop in total dwelling approvals, which fell 2 per cent, driven by a 20 per cent decline in unit approvals, partly offset by a 4 per cent rise in house approvals.

An economist at BIS Oxford Economics Maree Kilroy noted that despite showing signs of an improvement, the ABS data reflects an underlying downturn in demand for high-density housing.

“The downturn in high-density appears well entrenched, falling 76 per cent in January from the peak of the cycle, Ms Kilroy said.

“Showing no signs of easing, Queensland and Victoria continue to weaken as oversupplies in some inner-city pockets discourage future high-rise development.”

The general weakness in housing market conditions was also reflected in property research group CoreLogic’s latest Hedonic Home Value Index:-

Stricter mortgage lending standards are expected to continue placing downward pressure on dwelling values, with the latest CoreLogic figures reporting a further nationwide decline.

Property research group CoreLogic’s latest Hedonic Home Value Index has revealed that national home values fell by 0.7 per cent in February, driven by a 0.9 per cent decline across Australia’s combined capital cities and a 0.3 per cent drop across combined regional locations.

The sharpest monthly decline was reported in Darwin (1.7 per cent), followed by Perth (1.5 per cent), Sydney and Melbourne (1 per cent), Brisbane (0.3 per cent) and Canberra (0.2 per cent).

Adelaide’s residential property prices remained flat, while Hobart was the only capital city to report an increase in the value of its dwellings, which rose by 0.8 per cent.

Reflecting on the results, CoreLogic’s head of research, Tim Lawless, said that while the national rate of decline eased in February, tighter credit conditions are continuing to stifle demand for housing.

“The national rate of decline eased relative to January and December when dwelling values were down by around 1 per cent. However, the February results remain overall weak, with the geographic scope of negative conditions broadening,” he said.

“The fact that we are seeing weakening housing market conditions across regions where home values were previously rising at a sustainable pace and economic conditions are relatively healthy is a sign that tighter credit conditions are having a broad dampening effect on buyer activity.”

On an annual basis, CoreLogic has reported that national dwelling values fell by 6.3 per cent in the 12 months to February 2019, largely spurred by a 7.6 per cent decline across Australia’s capital cities, particularly in Sydney and Melbourne where home prices declined by 10.4 per cent and 9.1 per cent, respectively.

However, Mr Lawless noted that properties in the most affordable end of the housing market are retaining much of their value, with a fall of 2.6 per cent over the 12 months to February, compared to a 10.7 per cent decline across the most expensive quartile of the housing market.

Mr Lawless attributed the varying trend to an uptick in demand for affordable housing from first home buyers (FHBs) and a reduction in demand for high-debt borrowing from lenders.

“The stronger conditions across the more affordable properties can be explained by the surge in first home buyer activity in these cities, as these buyers take advantage of stamp duty concessions available in NSW and Victoria,” Mr Lawless added.

“Another factor could be that lenders are likely reducing their exposure to borrowers with high debt levels relative to their incomes, which could be skewing demand towards the middle to lower end of the housing market in the most expensive cities.”

However, according to the analyst, the entrenchment of tighter credit conditions off the back of the banking royal commission would continue weighing on the national housing market.

“Stricter lending standards are a logical outcome following the royal commission, and we are likely in the early phases of a ‘new normal’ for mortgage lending where borrowers will face closer scrutiny around their expenses and ability to service a loan, and conversion rates on loan applications are likely to remain lower than they have been over prior years,” he said.

Mr Lawless added that low mortgage rates could help offset the headwinds, particularly if the Reserve Bank of Australia moves to cut the official cash rate in response to a potential slowdown in consumer spending.

“If households reduce their spending as the wealth effect continues to reverse, then interest rate cuts or other policy intervention could become more likely,” he concluded.

, which revealed that national home values fell by 0.7 of a percentage point in February, driven by a 0.9 of a percentage point decline across Australia’s combined capital cities and a 0.3 of a percentage point drop across combined regional locations.

On an annual basis, CoreLogic has reported that national dwelling values fell by 6.3 per cent in the 12 months to February 2019, largely spurred by a 7.6 per cent decline across Australia’s capital cities, particularly in Sydney and Melbourne where home prices declined by 10.4 per cent and 9.1 per cent, respectively.

The latest Financial Aggregates data:-

Stricter mortgage lending standards are expected to continue placing downward pressure on dwelling values, with the latest CoreLogic figures reporting a further nationwide decline.

Property research group CoreLogic’s latest Hedonic Home Value Index has revealed that national home values fell by 0.7 per cent in February, driven by a 0.9 per cent decline across Australia’s combined capital cities and a 0.3 per cent drop across combined regional locations.

The sharpest monthly decline was reported in Darwin (1.7 per cent), followed by Perth (1.5 per cent), Sydney and Melbourne (1 per cent), Brisbane (0.3 per cent) and Canberra (0.2 per cent).

Adelaide’s residential property prices remained flat, while Hobart was the only capital city to report an increase in the value of its dwellings, which rose by 0.8 per cent.

Reflecting on the results, CoreLogic’s head of research, Tim Lawless, said that while the national rate of decline eased in February, tighter credit conditions are continuing to stifle demand for housing.

“The national rate of decline eased relative to January and December when dwelling values were down by around 1 per cent. However, the February results remain overall weak, with the geographic scope of negative conditions broadening,” he said.

“The fact that we are seeing weakening housing market conditions across regions where home values were previously rising at a sustainable pace and economic conditions are relatively healthy is a sign that tighter credit conditions are having a broad dampening effect on buyer activity.”

On an annual basis, CoreLogic has reported that national dwelling values fell by 6.3 per cent in the 12 months to February 2019, largely spurred by a 7.6 per cent decline across Australia’s capital cities, particularly in Sydney and Melbourne where home prices declined by 10.4 per cent and 9.1 per cent, respectively.

However, Mr Lawless noted that properties in the most affordable end of the housing market are retaining much of their value, with a fall of 2.6 per cent over the 12 months to February, compared to a 10.7 per cent decline across the most expensive quartile of the housing market.

Mr Lawless attributed the varying trend to an uptick in demand for affordable housing from first home buyers (FHBs) and a reduction in demand for high-debt borrowing from lenders.

“The stronger conditions across the more affordable properties can be explained by the surge in first home buyer activity in these cities, as these buyers take advantage of stamp duty concessions available in NSW and Victoria,” Mr Lawless added.

“Another factor could be that lenders are likely reducing their exposure to borrowers with high debt levels relative to their incomes, which could be skewing demand towards the middle to lower end of the housing market in the most expensive cities.”

However, according to the analyst, the entrenchment of tighter credit conditions off the back of the banking royal commission would continue weighing on the national housing market.

“Stricter lending standards are a logical outcome following the royal commission, and we are likely in the early phases of a ‘new normal’ for mortgage lending where borrowers will face closer scrutiny around their expenses and ability to service a loan, and conversion rates on loan applications are likely to remain lower than they have been over prior years,” he said.

Mr Lawless added that low mortgage rates could help offset the headwinds, particularly if the Reserve Bank of Australia moves to cut the official cash rate in response to a potential slowdown in consumer spending.

“If households reduce their spending as the wealth effect continues to reverse, then interest rate cuts or other policy intervention could become more likely,” he concluded.

from the Reserve Bank of Australia (RBA) has also reported that in the month to 31 January 2019, total housing credit volumes grew 0.2 of a percentage point in seasonally adjusted terms, a 0.1 of a percentage point decline from the 0.3 of a percentage point growth in December 2018.

Further, in the year to January 2019, housing credit grew by 4.4 per cent, slowing by 1.9 per cent when compared to growth of 6.3 per cent reported in the 12 months to 31 January 2018.

The slump was triggered by owner-occupied credit growth of 6.3 per cent over the same period and investor credit growth of 1.0 per cent.

About ljgrealestate 据联大

Removing the Hassle from Sales and Rentals across South East Queensland. Aim to Empower other like minded Property Investors. LJ Gilland Real Estate Pty Ltd LREA推荐书LJ Gilland房地产 http://ljgrealestate.com.au/testimonials/ http://ljgrealestate.com.au/competitive-commission/ http://ljgrealestate.com.au/property-management/ http://www.facebook.com/ljgrealestate L J Gilland Real Estate is a prestigious boutique agency specializing in Property Investment Management Services and the Sales of Investment Properties with tenants in place. Comprised of a top performing group of handpicked specialists, our Agents proudly serve Property Investors in Queensland. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Carlos and Linda Debello offer property investor's the confidence to sell and lease in any market. We provide comprehensive market appraisals, exclusive multimedia marketing campaigns, and knowledgeable, highly personalized counsel on all aspects of real estate. Our Property Management Team is equally considerate, offering investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. http://goanimate.com/movie/0M4bvcZzgIbI?utm_source=linkshare&uid=0u6RGtWsmlVc Carlos’ direct mobiles are 0400 833 800 & 0413560808. Linda’s mobiles are 0409995578 & 0414978700 (prefer email contact for Linda). Office 07 3263 6085. http://www.ljgrealestate.com.au http://www.yellowpages.com.au/qld/aspley/lj-gilland-real-estate-pty-ltd-14091356-listing.html http://au.linkedin.com/in/lindajanedebello http://twitter.com/GillandDebello http://www.facebook.com/pages/ljgrealestate
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