House prices likely to stay flat
While house prices increased in June from a month earlier, the general trend over the past three months has been flat at best, according to ANZ.
Tuesday, July 27th 2010, 12:00AM
by The Landlord
The ANZ Property Gauges, which uses 10 indicators to measure the state of the property market and for signs of change that will impact on house prices, show house prices remain uninspired despite increasing last month from $350,000 to $352,500 and look set to stay at a similar level for some time.
"It's hard to see this picture changing any time soon, with weekly mortgage approvals for the first week in July looking even softer than in June," ANZ said in its Property Focus report.
Of the 10 indicators, only two showed to have any upward influence on prices.
Supply and demand still remains out-of-balance and ANZ warns that although "the jaws remain wide open", this could rapidly change without warning.
Consents and house sales also look to be running out of puff, with headwinds predicted. Total sales fell to their second worst June in a decade last month, with 4,575 sold, compared to 5,206 in May and 6,040 in June last year.
Affordability looks set to improve, on the back of lower interest rates, while borrowers continue to pay down debt and serviceability and indebtedness eases.
Liquidity, which looks at available funds in supporting the property market, remains ‘illiquid'.
ANZ points out renters can breathe easy for now, as rents are also remaining flat.
Mortgagee sales have rebounded somewhat recently, and easing migration and lagging globalisation will see a lid kept on house prices for now.
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