Mercia | Taxation, Business & Finance Advisers

RP Data’s measure of pre-listing activity by property professionals, the Market Activity Index, is beginning to climb once again after its typical Christmas/New Year period lull.

As we release our first rpdata.com Property Pulse for 2011, it is unfortunate that the biggest news by far is the carnage left behind in the wake of the Queensland Floods and the impact now being felt in regional areas of Victoria. Outside of the devastation of these floods, there has been a lot of key economic data released during the early part of 2011.Building Approvals data released by the Australian Bureau of Statistics (ABS) showed that approvals fell by -9.9% over the month with private sector houses down -14.7% whilst private sector units increased by 23.9%. On an annual basis, total building approvals have fallen by -4.2% for the year, coming off an already quite low base.The ABS has also released Housing Finance data for November 2010. The data showed that total owner occupier finance commitments increased by 2.5% over the month however, they are down -11.5% over the year. During the month, the total value of housing finance commitments increased by 1.2% however, over the year the total value of finance commitments remains -7.9% lower. Finally, the proportion of owner occupier purchasers that were first home buyers increased to 15.6% of the market during the month and these purchasers had an average loan size of $277,900, the lowest average loan size since October 2009.Westpac and the Melbourne Institute this week released their monthly Consumer Sentiment Index. The Index appears to have been heavily impacted by the Qld and Vic floods with a drop of -5.7% to 104.6 points. This result indicates that consumers are still generally optimistic but there has been a large slide in the most recent month with consumers likely concerned about the impact of the floods on the national economy.

Advertised Stock on the Market The easing of the Market Activity Index over recent weeks has been reflected in the number of properties advertised for sale also falling. Listings peaked over the four weeks to 12 December 2010, since that time, total listings have fallen by -15.7%. Over the past week, new listings have fallen by -8.4% and total listings are down -2.5%, expect some further weakness in coming weeks due to the floods.

Latest National Auction Clearance Rates The number of properties being taken to auction across Australia remains at very low levels with just 55 capital city auctions having taken place last week. The weighted average auction clearance rate across the combined capital cities last week was just 16.0%. Over the coming weeks the number of auctions taking place will increase and offer a much better reading on the state of the market.

Number of Properties Advertised for Rent The number of new and total properties advertised for rent has increased by 4.8% and 0.4% respectively over the last week. Rental data doesn’t tend to be impacted as much by the Christmas / New Year slowdown however, new listings are down -20.2% over the month and total listings have fallen by -9.0%.