Two housing industry research firms, RP Data and Rismark International, both announced jumps in capital city house prices of between 5% and 6% for the five months to May. Sydney jumped 5.2%, Melbourne 6.1% and even Darwin grew 5.5%. This is a particularly good result given that the Housing Industry Association highlighted that new homes in New South Wales slumped by 10% in May due to the closure of date of the First Homeowners Grant. Supporting these figures was the Reserve Bank's announcement that housing credit grew 0.5% in May, meaning people were borrowing more despite the drop in new home sales. Economists are pointing to the lack of new construction creating demand for existing housing stock -- all of which will support sales in the village sector. In NSW the approvals for townhouses of new apartments has fallen to the lowest level since 1983. Only 482 were approved in May for instance. This compares to nearly 4,000 being approved each month just a few years ago.
Interestingly each of the major village operators are reporting comparable capital growth for the year of around 6%.
