Gap in Median Price of Houses and Units
An article on the website The Adviser puts focus on how the gap in prices of detached houses and units have risen in an unprecedented way in 3 capital cities wherein it is non-existent in a fourth capital city. In Canberra, Sydney and Melbourne, the hiatus has never been greater. Median Unit prices in Canberra, Sydney and Melbourne are 70.1%, 71.7%, and 74.2% of their house prices respectively.
The story of various capital cities
The median unit price in Darwin, on the other hand, is exactly the same for its units and detached houses. The trend exhibited by the key capital cities goes on to answer the emergence of another trend- record high unit approval. Of course, the hindrance, if any, may come from over-development subsequently leading to over-supply.
You can read the original article here.
Talking of building approvals in general, December 2014 is the first time Australia has shot past the 200,000 mark. Detached housing took the pie with a 9.9% raise over December 2013 figures. This said, units also rose by 4.8% which is more than decent. The building boom can lead to a reduction of house prices thus steering us away from the perennial affordability debate.
Low interest rate environment
Of course, the low interest rate environment- further boosted by the latest rate cut of 25 basis points- will only help drive the economy from the mining to the construction sector. It remains to be seen how well we can reap the dividend of the government’s move in the long run.