Antipodean Housing Deep Dive

All good things come in moderation

Each month we take a graphical deep dive into the Antipodean housing markets.

Housing price growth in Australia has slowed in recent months and are currently moving sideways in inflation-adjusted terms. Dwelling prices continue to decline in Melbourne - where for sale listings have increased the most - and prices fell marginally in Sydney in October. For sale home listing activity has lifted noticeably in Sydney.

Despite moderate price growth, growth in housing credit has continued to strengthen, particularly in the investor segment.

Across the ditch in New Zealand, housing prices continue to decline but signs of stabilisation are becoming apparent. Mortgage interest rates have fallen sharply in New Zealand and should support stronger housing price growth.

The residential construction industry has further pain to endure before the cycle turns. While home building consents appear to have stabilised, the low level points to further falls ahead for dwelling investment.

In contrast, the housing construction cycle in Australia has been relatively shallow, in part reflecting capacity and other constraints in the broader construction industry. The pipeline of incomplete dwellings in Australia remains relatively large, but is declining. Home building approvals have risen in recent months, particularly for detached houses, and especially in Western Australia.