Vital signs good but confidence down

PROPERTY NEWS

An economic and property snapshot produced by PRDnationwide reveals a robust economy, increased house prices – but a slip in consumer confidence.

Figures published in PRDnationwide’s Quarterly Economic and Property Report shows commodities prices are up 22.6 per cent compared with 12 months ago. And debt-laden families should breathe a sigh of relief with interest rates expected to remain on hold.
PRDnationwide managing director Jim Midgley said the report showed numbers of new dwellings decreased during the March 2010 quarter by 7.7 per cent (39,112 new homes across Australia) but compared to the previous year increased by 39.7 per cent. “Investor financial commitment has now reached $8 billion and has not been this strong since June 2007 when property prices were at their peak,” Mr Midgley said.
“Investor finance now accounts for 36.8 per cent of all financial housing commitme
nts and has not had such a large portion of the market since December 2003.” Report author Aaron Maskrey, PRDnationwide research director, said that on a state-by state basis Victoria continued to record the highest number of dwelling commencements during the March quarter, representing 34 per cent of all dwellings commenced nationally.
“It is anticipated that dwelling investment is set to grow by 7.5 per cent during 2010 to 2011,” Mr Maskrey said.
‘Empty nester’ baby boomers would drive the greatest demand for new homes over the next 25 years. The median house price in Australia climbed on average by 12.1 per cent in May. Melbourne has recorded the biggest increase of 18.2 per cent while Darwin prices rose 16.8 per cent. Perth recorded the smallest increase of 6.1 per cent, where the median price currently sits at $310,050.
“It is anticipated that both Sydney and Perth shall receive stronger house price growth during this year,” Mr Maskrey said.