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Wednesday, 27 July 2011

MEDIA RELEASE

Comments: This e-mail address is being protected from spambots. You need JavaScript enabled to view it , Principal Research Fellow HVRF

Gloomy outlook for renters, but hope for Region’s home builders

The outlook for the Hunter’s residential housing market remains largely beholden to an increasingly opaque interest rate outlook, according to the HVRF’s 2011 Hunter Region Residential Market Outlook (HRRMO).

HVRF Principal Research Fellow Simon Deeming said the Lower Hunter’s residential market remains benign but functional, with house prices stable and sales volumes solid. The Upper Hunter, where house price growth has over-performed in recent years, appears to have reached a plateau.

“Both areas are responding to the restoration of restrictive monetary policy, which returned housing affordability to unsupportive levels and weakened purchaser sentiment, particularly for First Home Buyers (FHB).”

HRRMO indicates trends in a number of key Hunter Region data including house prices, number of sales, rental prices and number of bonds, vacant lot sales, housing approvals, interest rates and home buyer sentiment. Key findings from the 2011 edition include:

  • Median house prices has flattened across the Hunter and most metropolitan markets in NSW, although sales volumes in the Lower Hunter retained momentum;
  • The rental market remains very tight, pushing rents higher, and the trends suggest that this pressure will remain;
  • The HVRF First Home Buyers Affordability Index has returned to a level that presents significant hurdles for FHBs in the Lower Hunter. The analysis also shows a modest improvement in affordability for FHBs in recent quarters, fuelled by modest price growth and recent mortgage rate stability;
  • Property development continues to face the headwinds of high interest rates and household/purchaser caution, but vacant lot sale numbers are surprisingly solid and house approvals hint that the level of home construction may rise. 

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