Housing demand stronger than expected

Melissa Jenkins
(Australian Associated Press)

Underlying demand for housing is stronger than economists previously thought, the latest national snapshot reveals.

The 2016 Census also shows more people are paying off a mortgage than 25 years ago but fewer own their property outright.

Commonwealth Bank of Australia economist Kristina Clifton said estimates of population growth and household size can be used to measure additional housing demand.

The population data was revised up and the number of people per dwelling has remained constant at 2.6, rather increasing slightly as expected, she said.

“Overall this tells us that underlying demand for housing is a bit stronger than we previously thought,” Ms Clifton said.

“Nonetheless, with new construction running at record levels for several years now we estimate that pent up demand has now been satisfied at an aggregate level.”

When it comes to paying off their mortgages, fewer Australians own their houses outright than 25 years ago.

Some 31 per cent of people had paid off their mortgage in 2016, down from 32.1 per cent in 2011 and 40 per cent in 1991.

There were more people renting in 2016 than five years earlier but rental affordability has worsened.

Almost 31 per cent of householders rent, up from just under 30 per cent five years ago and 27 per cent in 1991.

But the proportion of householders pouring 30 per cent or more of their income into rent grew to 11.5 per cent in 2016, compared with 10.4 per cent five years earlier.

Meanwhile, the latest property figures show house prices have again lifted in Sydney and Melbourne, with the median price of a house sold in the Harbour City now at $1,000,500.

In Melbourne, the median house price was $715,549, according to the latest data from property analytics firm, CoreLogic.

Sydney’s home values rose slightly more than Melbourne’s – up 1.0 per cent compared to its southern rival’s 0.8 per cent – in the week to June 25, from the previous week.

But the value of homes fell in Brisbane, Adelaide and Perth, with Adelaide dropping one per cent, the Queensland capital losing 0.3 per cent and Perth declining 0.2 per cent compared with the week before.

CoreLogic said the national auction clearance rate across Sydney, Melbourne, Brisbane, Adelaide and Perth remained below 70 per cent.

Preliminary results showed 69.1 per cent of auctions were successful in the week to June 25, compared with 66.7 per cent the previous week, but the clearance rate was relatively similar to a year ago.

CAPITAL CITY PRIVATE TREATY MEDIAN PRICES

HOUSES

Sydney – $1,000,500

Melbourne – $715,549

Canberra – $645,000

Darwin – $577,500

Brisbane – $513,000

Perth – $505,000

Adelaide – $443,500

Hobart – $359,500

Combined capitals – $707,071

UNITS

Sydney – $738,000

Melbourne – $536,400

Perth – $418,500

Darwin – $462,500

Canberra – $390,500

Brisbane – $378,000

Adelaide – $328,000

Hobart – $286,500

Combined capitals – $584,953

Source: CoreLogic Property Market Indicator Summary week ending June 25, 2017.

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