In the week ended 14 March 2013, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, recorded a big 0.47% increase, which followed last week’s huge 0.67% increase. It was also the fifth weekly rise in a row (see next chart).
Value gains were broad-based, with only Adelaide recording losses (see next chart).
Values are up by 1.15% so far in March, again with all capitals except Adelaide recording rises (see next chart).
Over the past 12 months, values have risen by 2.29% at the 5-city level, with all major markets, except Melbourne and Adelaide, experiencing value increases (see next chart).
The next chart plots the daily movements on a 14-day moving average, in order to smooth volatility. As you can see, all major capitals except Adelaide are in an uptrend (see next chart).
Values are now down -3.3% since peak at the 5-city level, with Sydney almost recovering all of its lost ground, and Brisbane and Melbourne suffering the greatest losses (see next chart).
However, major capital home values have now gained 4.4% since bottoming in May 2012, with all capitals experiencing a solid rebound (see next chart).
unconventionaleconomist@hotmail.com
They are strong gains.
Yes, Peter, stronger than the CPI or wage growth, so I assume you view the rise reported as anegaative.
No it’s not a negative – don’t presume to think for me Paul.
High growth will put pressure on the RBA for rate rises and that won’t help business and the economy, so although I’m ok with these gains, I don’t want to see rampant house price growth over a sustained period.
Slow growth won’t have that effect, but it will promote spending, which is good for the economy. People seem to forget that spending has a beneficial effect as long as it doesn’t become disproportionate.
Fair enough Peter. So what is slow growth to you?
I also was not making an asssumption about how you think as you have already stated that rises beyoond cpi or wages growth in the long term is not a good thing for an advanced society.
Not more than wage growth rates, so in other words little or no real growth. Actually slightly negative real growth for 5 years or so would be ideal, but we never get what we wish for so lets see what happens.
Thanks Peter. I am sure your frank reply will make many here think twice about your comments overall.
Good work…
The figure I would be really interested in is the over all volume, in numerical and monetary terms of property sold. It may make interpretation of the figures more meaningful. Which segment and what proportion of the bell curve is being sold here. Are Lowe end properties being sold at higher prices or higher end properties at lower prices, or is the market improving over a. Volume may also give an indication of the statistical power of the figures. People more informed on such matters may be able to enlighten me on these facts.
House prices to the moon! Better get in now before it’s too late. And I’m probably not joking …
For sure, especially with all the foreign investment, best buy now, but remember that we are all punching our children in the faces. They will never own their own home, because at this rate it will be 20 times income for a crappy flat in Sydney.
Be ready for the generations that live at home, live in shared houses and never own their own homes.
A few of us have been telling people for months on this site and others.
Even Melbourne is moving big, out West where I am from despite all the new land it is still selling.
Things have picked up – ignore it at your own peril.
yeah, those with head in the sand got rolled over.Frankly it s get too fast, I have seen some huge prices increased this month and lot of coming auctions are now undercontract.
for QLd I would say it s much stronger than in 2009-10, RP Data is reporting a strong growth but I thing they are underreporting it, a 10% plus is not sustainable for anyone, are we going to be even worst than NZ ?
Thanks for the info Zerosignal.
We drove around Melbourne’s west during recent holidays and saw multiple large empty housing estates with for sale signs and mortgagee sale signs also. Didn’t look like a boom town to me.
I am not sure where you went but next time you need to look at the 20km range from Melbourne to the SW.
Plenty of land being sold, sure it isn’t boom time but it isn’t bust either.
Hey Zerosignal….
What is the company you work for? You mentioned it yesterday that they were hiring… A buddy of mine from the UK has been looking for work in that industry and I would like to give him a heads up as to what company it is that is looking to hire.
Cheers!
Yes there are some areas of Melbourne doing it tough.
But areas like Point Cook have steadily falling stock and increasing vendor sentiment since January. It’s well above the bottom of mid 2012.
http://sqmresearch.com.au/graph_stock_on_market.php?postcode=3030&t=1
http://sqmresearch.com.au/graph_median_weeks.php?postcode=3030&t=1
All you who celebrate rising house prices show how economically illiterate you are.
Australia is the most expensive country in the world, all around there are people leaving because of the high cost of living.
If you think that this is sustainable then you are really really stupid.
But quick go buy some houses, but make sure that you let us know where they are so that we can make a cheap offer when it all comes crashing down.
Again I ask the question. If volumes are lower do price rises truly reflect a strengthening of the market? Could it not be more expensive properties being sold at a slight discount. Didn’t ABS figures show further drops in housing financing. Aren’t there proportionally less first home buyers now? How can one weave these factors into a coherent narrative. Finally how noisy is the data on this weekly index?
Those are interesting questions. Here are my thoughts on possible explanations:
* Lower sales volumes could simply be due to less properties for sale – especially in Sydney, a trend confirmed by SQM stats.
* The above would mean more buyer competition which could explain the upwards price pressures on lower sales volumes?
* RP Data is a hedonic index; tracks “like-for-like” sales and price changes, so the mix of sales (high end, low end etc) has much less impact (if any) on the RP Index. Median indexes like the ABS do have some compositional bias issues, but the stratification method applied removes a lot of that as well. Bottom line the stats are usually pretty good – certainly their trends can be relied upon, based on many years (decades even) of past history.
* The lower housing finance numbers may be due to less FHBs – upgraders generally borrow less compared to the value of the property they buy. Also, OO purchase finance is still rising in those latest ABS finance stats, as is investor purchases. SMSF purchases may also be impacting lower finance figures?
None of the above is gospel, just reasons I see that might explain what we are observing.