Australian house price growth falls in many capital cities in first quarter of 2013
House price growth in Australia’s capital cities stagnated in the first quarter of 2013, up 0.1% overall but prices fell in eight cities, according to figures from the Housing Industry Association (HIA). Across capital cities the established house price index rose by 0.2% in Melbourne, 1.2% in Perth, 1.9% in Darwin and 0.2% in Canberra. Prices fell by 0.3% in Brisbane, by 0.1% in Adelaide and by 0.3% in Hobart. Established house prices in Sydney were unchanged over the March 2013 quarter.
The price of new homes is also falling. The new house price index fell by 1% in Sydney, by 5.2% in Melbourne, by 1.3% in Perth, by 0.1% in Hobart, by 1.3% in Darwin and by 0.1% in Canberra. Project house prices fell by 0.6% in Brisbane and by 0.1% in Adelaide. ‘These figures present a weak update for the housing industry. It confirms our long held position that any recovery that is underway in the housing market is a delicate one,’ said HIA senior economist, Shane Garrett.
‘The robust price growth we saw at the end of 2012 has petered out and once again the market will have to struggle to regain momentum. Mortgage lenders as well as the Reserve Bank need to step up to the plate in terms of interest rates at this time,’ he explained. ‘Rising house prices, providing they occur at a manageable pace, play a key role in bolstering household confidence. A sustained return to manageable price growth will lead to a multitude of knock on benefits across the wider economy. The importance of a strong housing market should not be underestimated,’ he added.
Quote from AustraliaForum.com : “New home building in Australia in 2013 is likely to fall short of what is needed as land sales are well below requirements, a new report suggests.”
The HIS is also highlighting that not enough homes are being built in Australia. ‘We are currently building 25,000 homes less than we were 10 years ago, and last year built around 10% under average over the past decade. With the population exceeding 23 million in recent weeks, the logical question is where will the growing population live?,’ said HIA managing director Shane Goodwin.
‘There has been significant policy focus on health and education as part of the election debate, and this is a good thing, but basic shelter is the bedrock on which all other aspects of our lives are built. Housing must be given a higher priority by the major parties to reflect the social and economic importance it has in our lives,’ he added.
The HIIA argues that new home building is being choked by red tape, an inflexible industrial relations system and a disproportionate level of taxation. ‘We are therefore encouraging anyone with an interest in improving housing affordability and protecting the one million plus jobs in building construction to join us in urging the future government to make housing policy a priority,’ said Goodwin.