House prices in capital cities grew 0.2% in March, according to the latest figures from RP Data, and the market was flat during the first quarter of the year, but key industry metrics are beginning to show some improvement.
The figures also come as auctions data from the weekend shows clearance rates remained steady or dropped in both Melbourne and Sydney despite a higher number of listings.
However, RP Data director Tim Lawless points out the flat growth in the March quarter is the strongest result since March 2011, when values increased by 0.7%.
He attributed the success to growth in the Sydney market, where values increased by 1.1% over the quarter. “Values were down across many of the other capital cities over the quarter,” he noted.
The largest increases were in Sydney, Darwin and Canberra, where values increased by 1.1%, 1.7% and 4.5% respectively. Perth values also rose by 0.5%.
However, other areas of the market remain soft, including in Hobart, where values fell by 2.4%, and in Melbourne, where values fell by 2%, and by 5.4% over the past year.
Values also fell in Brisbane and Adelaide by 1.8% and 1.6% respectively.
However, over the year, the fall in values appears stronger. Capital city values have fallen 4.4%, with Hobart down 7.3%, Brisbane down 6.1%, Adelaide down 5.7% and Melbourne down 5.4%, although values are still up 45.5% since the start of 2007, RP Data said.
Rismark International managing director Ben Skilbeck said in a statement there are good signs the market is beginning to recover, with the ratio of national house prices to household disposable incomes currently below the decade average, along with the value and number of loan approvals now at their highest since the end of 2009.
“First home buyers as a proportion of all home loans approved are back to levels not seen for two years,” he said.
“The number of properties available for sale is continuing to moderate from the historic highs which peaked late last year and auction clearance rates have been holding above 50% for most of 2012.”
Lawless also pointed out the latest Financial Stability Review from the RBA suggests more mortgage holders are ahead of their payments, “a sure sign that Australians are coping with their mortgage debt”.
Meanwhile, auction clearance rates have remained consistent with previous weeks, even as the number of listings in capital cities has increased substantially.
In Melbourne, the Real Estate Institute of Victoria said there were 929 listings this week, compared to 808 at this time last year, with a clearance rate of 61%.
“In light of the high volume of homes on offer this is a good result and shows that the market is performing consistently,” REIV chief executive Enzo Raimondo said in a statement.
In Sydney, the market recorded a 53% clearance rate from 737 listings, while Adelaide and Brisbane recorded rates of 51% and 27% respectively.