Housing prices DOWN
January isn't a very good time for measuring much related to housing, with so few transactions to analyse or extrapolate from, but since everything is reported these days here are the latest tables.
Sydney house prices were 10.9 per cent lower over the year to January 2019, and unit prices in teh harbour city were 6.9 per cent lower.
Melbourne followed quite a similar trajectory, with house prices down by 10.6 per cent.
Source: CoreLogic
The upper quartile - the most expensive end of the market - has borne the brunt of price falls.
The cheaper end of the market has generally speaking held up better, partly thanks to first homebuyer incentives, and partly because that sector of the market is less volatile through the cycle anyway.
Source: CoreLogic
Over the past year the worst performing Sydney sub-regions have included many of those supply-responsive markets where construction has boomed such as Ryde (-13.4 per cent), Sutherland (-11.6 per cent), Baulkham Hills and Hawkesbury (-11.3 per cent), Parramatta (-10.9 per cent), and the south west (-10.8 per cent).
Source: CoreLogic
Quite messy in many parts of Sydney, and in some parts of Melbourne too.
If the ALP's Bowen and Shorten are successful in ramming through their proposed tax changes it seems quite likely that rental yields in the big cities will need to be closer to 4 per cent than the ~3 per cent we had seen at the lows.
They aren't there yet, but with prices down through 2018 yields are at least moving in that direction.
Source: CoreLogic
Treasurer Frydenberg has said he wants to see the finalisation of the Royal Commission report next week allowing credit to flow more freely.
Good to see the pendulum theory of credit cycles getting a run courtesy of Dr. Joiner!
