According to new research by Onthehouse.com.au, residential capital growth rates for May were lower than expected, with numbers dropping in many capital cities.
Nationwide, houses values grew by only 0.36%, while unit values dropped by 0.23%, in May.
This compares to last quarter where house values grew by 1.71% and unit values grew by 1.17%.
Onthehouse.com.au consulting analyst John Edwards said the data clearly pointed to the difficult affordability conditions for the median family in most capital cities.
The number of people who could afford to buy and then repay a loan for a home was now limited, he said.
For example, when looking at the calculated figure the median Sydney family would have to spend after tax and meeting home loan repayments, it was too small to maintain a reasonable standard of living.
“The Sydney median family who buy the current median property valued at $823,500 with a 20% deposit only have around $821 per week to spend after making home loan repayments. This amount is clearly insufficient for comfortable living.”
In May, Sydney house growth stalled at just 0.24% - although it still recorded 17.42% growth over the last 12 months.
The data also indicated that the Sydney unit market had passed its peak, with growth of 2.81% for the quarter ending May.
Edwards said it was not clear whether the house and land market had arrived at the same position – although auction clearance rates suggested the market was slowing.
Meanwhile, Melbourne house values fell by 0.03% in May, which meant they entered negative territory. However, over the past 12 months, this market recorded 9.45% growth.
Slower growth rates would be beneficial for the economy, as they meant a property market “bubble” followed by a severe correction was likely to be avoided, Edwards said.
However, the Sydney market was still overvalued and too expensive, he added.
“The data from May is not sufficient on its own to confirm that this lower rate of growth is about to be a new feature, but my best guess is that this will be the case.”
May 2014 house and unit growth rates by state and by capital:
| Houses | ||||
| Area | Median Value | Growth May 2013-May 2014 |
Last Quarter | May 2014 |
| ACT | $531,500 | 2.28% | 0.07% | 0.55% |
| Adelaide | $412,000 | 4.61% | 1.55% | -0.15% |
| SA Country | $252,500 | -0.37% | -2.85% | -0.29% |
| Brisbane | $467,000 | 7.52% | 2.77% | 0.41% |
| QLD Country | $379,000 | 2.76% | 1.33% | -0.51% |
| Darwin | $575,500 | 1.30% | -1.22% | -0.53% |
| Northern Territory | $538,500 | 3.24% | 1.92% | 0.98% |
| Hobart | $361,000 | 0.41% | -1.18% | -0.82% |
| TAS Country | $266,500 | -0.32% | 2.18% | 0.87% |
| Melbourne | $627,500 | 9.45% | 1.77% | -0.03% |
| VIC Country | $337,500 | 3.52% | 0.64% | 0.28% |
| Perth | $526,500 | 4.19% | -2.24% | -1.90% |
| WA Country | $352,500 | 2.87% | 5.01% | 2.38% |
| Sydney | $823,500 | 17.42% | 4.72% | 0.24% |
| NSW Country | $375,500 | 7.15% | 1.65% | 0.34% |
| Australia | $464,500 | 5.76% | 1.71% | 0.36% |
| Units |
||||
| Area | Median Value | Growth May 2013-May 2014 |
Last Quarter | May 2014 |
| ACT | $410,000 | 1.07% | -0.56% | -0.28% |
| Adelaide | $315,000 | 3.53% | 2.54% | 0.64% |
| SA Country | $239,000 | 13.73% | 6.43% | -0.02% |
| Brisbane | $364,500 | 5.27% | 1.59% | -0.22% |
| QLD Country | $314,500 | 4.93% | 1.38% | 0.62% |
| Darwin | $431,000 | 2.50% | 0.43% | 0.42% |
| Northern Territory | $416,000 | 4.26% | 2.38% | 1.53% |
| Hobart | $261,500 | 7.12% | 2.31% | -2.38% |
| TAS Country | $189,500 | -6.47% | -5.77% | -2.73% |
| Melbourne | $458,000 | 6.32% | 1.58% | -0.07% |
| VIC Country | $257,000 | 1.21% | -0.39% | -0.20% |
| Perth | $459,000 | 1.84% | 1.14% | -1.21% |
| WA Country | $322,500 | 6.54% | 0.90% | -1.02% |
| Sydney | $562,000 | 13.59% | 2.81% | 0.27% |
| NSW Country | $315,000 | 6.86% | 2.15% | -0.08% |
| Australia | $428,500 | 6.88% | 1.17% | -0.23% |
