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Australian housing costs rise

Australian housing costs rise

Australian housing costs rise

CoreLogic's daily dwelling values index, which tracks changes in home prices across the five major capital city markets, increased by 0.32% in the week ended July 13 after taking a break the previous week.


This came after the Reserve Bank of Australia decided to maintain the benchmark cash rate at 4.10%.


All major capital cities saw rising values this week, but Brisbane saw the largest increase with a 0.58% increase in values.


At the aggregate level of the five cities, quarterly values have now increased by 3.5%, led by Sydney (4.7%) and Brisbane (3.8%). The other major capitals have seen significant increases as well.


Separately, CoreLogic reported that final auction clearance rates increased to 68.4% across all capital cities for the week ended July 9 from 64.9% the previous week.

Following two straight weeks of decline, Melbourne's final clearance rate increased to 68.0%, up 4.7 percentage points from the week before at 63.3%.


Sydney's clearance rate recovered 1.6 percentage points to 68.8%, ending a slide that had lasted five weeks.


CoreLogic's daily index, clearly illustrates how the auction market is signalling a slowdown in growth. Auction clearances are trending lower, and historical correlations indicate that price growth will slow down.


Given that homeowners are starting to succumb to the RBA's unprecedented monetary tightening and that hundreds of thousands of borrowers are switching from low fixed mortgage rates of 2% to variable rates approaching 7%, this makes sense.


The fact that the housing market recovery happened in the face of rising mortgage rates as well as declining listing and sales volumes makes it unusual.


The price recovery is now in danger due to the unseasonal increase in listings.


The data over the coming weeks ought to be interesting.

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