Market indicators positive but confidence still to recover

A decline in the value of city dwellings for the month of May could be a result of falling consumer confidence, according to RP Data’s national research director.

The results of
the RP Data-Rismark analysis come on the back of a fall in consumer confidence
over both April and May, says Tim Lawless.

The combined
capital city index fell by 1.2 per cent in May and 0.5 per cent in April,
although values are still higher than this time last year.

Lawless says the
combined capital city index is stock weighted, meaning that larger cities like
Sydney, Melbourne and Brisbane have a larger impact on the aggregated results.

“If we see
confidence levels remain in the doldrums, there is likely to be a similar
dampening effect on the housing market,” he says.

Lawless noted the
two months of lower dwelling values comes at a time when a number of metrics
such as auction clearance rates, vendor discounting, time on market and
transaction volumes are performing well.

clearance rates have been nudging the 70 per cent mark on a weighted average
basis over the past couple of months, with average selling time improving and
vendors now offering up lower discounts from original asking prices in order to
make a sale. We have also seen the number of house and unit sales rise compared
with the same time last year,” says Lawless.

According to
Rismark’s chief executive officer Ben Skilbeck, the result may be due to some
market volatility associated with vendors acquiescing and taking the
opportunity to sell.

The analysis
also showed weekly rents across the combined capital cities were up 3.1 per
cent over the past 12 months. Values shifted slightly higher over the year, as
well as gross rental yields holding reasonably steady at 4.2 per cent for houses
and five per cent for units.

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