Amid the mass of statistics describing city property this year, there is this underlying message: recovery.
Data from three key sources shows the decline in values in the eight state and territory capitals was arrested in the March Quarter – and in some cases prices started to rise again.
Looking at the weighted average across the eight cities, Australian Property Monitors records a small rise in the median house price, RP Data effectively reports no change and the Australian Bureau of Statistics says there’s been a further small decline.
For apartments, both RP Data and Australian Property Monitors both report small rises in the March Quarter (the ABS doesn’t have data on units).
In most cases, median price levels are still below those of a year ago, but the March quarter is the first genuinely positive result since 2010.
It’s not always easy to find patterns when examining figures from multiple sources, because there are difference methods which often produce puzzling contradictions. The ABS says Hobart house prices fell 2.7% in the March quarter, but RP Data says they rose 6.5%. Melbourne is given a small rise by one source, a small decline by another and a significant decline by the third. Go figure.
These variances can be frustrating for investors trying to see trends in the published data.
But here’s what we can say for sure about house price levels in the eight capital cities:
- More house markets rose than fell in the March quarter. APM says five of the eight cities showed rising prices, while the ABS reports rises in four cities.
- Darwin was the star performer, with all three research sources recording strong increases in the quarter, ranging from 4.3% to 6%.
- Canberra’s market was solid, with all three sources recording no change or a small rise (this may change later in the year, following Wayne Swan’s cuts to the public service).
- Brisbane has arrested the decline caused (partly, at least) by the January 2011 floods. One source recorded a small rise in the house median in the March quarter, while the other two reported very small declines.
- Perth, like Brisbane, is no longer a falling market. The ABS and APM both report small rises in Perth’s median house price.
- Sydney achieved a positive result in the March quarter, according to both RP Data and APM.
In annual terms, most cities are still in the red, although the ABS credits Darwin with a 3.5% annual rise.
Brisbane prices are still below pre-flood levels, but not by much. The ABS says Brisbane’s index is down 3.7%, and APM reports a median price drop of 4.1%. That’s a pretty solid effort considering the devastation inflicted by the elements and makes nonsense of the more hysterical media claims at the time (one TV news bulletin predicted a 50% collapse in Brisbane values).
Hobart and Melbourne are in the worst positions, relative to early 2011. The ABS and RP Data have Hobart down 7% or 8%, and Melbourne’s annual decline is around 6% or 7%.
The results for apartments in March quarter were strongly positive. RP Data reports rising medians in all capital cities except Brisbane.
APM, a little less bullish, reports rises in Sydney, Darwin, Canberra and Hobart, and no change in Perth.
Both sources agree that median unit prices rose in Canberra, Darwin, Sydney and Darwin, with essentially no change in Perth.
These figures represent average situations across the major cities and hide myriad differences in sub-markets. But the patterns are important and primarily they tell us that most residential markets in our capital cities have stopped declining – and that some have started rising.
These results pre-date the interest rate cuts now being handed out by lenders and that suggests more positive markets this year than last, though rises should be moderate in most cases.
If you want serious growth in prices and rents, you need to head to the regions.
This article first appeared on Property Observer.