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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
AUSTRALIA
Australian home prices continued to rise at 0.6% m/m in April to be up 8.7% y/y but not all cities are rising at the same pace with Sydney and Melbourne lagging the other capitals, according to CoreLogic data. With the working age population rising almost 3% y/y in March and Q1 average building approvals running 10.1% below Q4, housing shortages and price pressures are likely to persist.
- CoreLogic notes that the lower end of the market is seeing strong growth in most regions, as poor affordability bites. Price growth for units has exceeded houses over the last 3 months.
- Transactions tend to be a lead indicator of prices and sales have stabilised since November’s RBA hike but they are still 5.1% higher than average. CoreLogic expects sales to remain lacklustre until the RBA eases providing some relief for affordability.
- We estimate that affordability deteriorated further in Q1 falling to 44% below trend from 43%, which would be the worst since our series begins in 1980. We assume that nominal disposable income rose 1.2% q/q, in line with the 2023 average. House prices rose a similar amount in Q1 and variable housing loan rates increased just under 0.1pp.
- Q1 rents increased 7.8% y/y up from 7.3% in Q4. House prices-to-rents, our measure of valuation, fell slightly in the quarter but housing is still just under 10% overvalued down from 11% in Q4.
Australia housing affordability vs home prices %
Source: MNI - Market News/Refinitiv/CoreLogic
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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