House prices continue to melt in October

R.P.Data results for October are out and it’s an ongoing Spring thaw, 0.5% down for the month seasonally adjusted, with an adjusted figure for September doubling the fall to 0.4%. Here’s the chart:

And raw:

And the R.P. Data House Price Index over time:

As well as, real house prices:

And finally, state by state numbers with Sydney and Canberra stable and all else sliding:

Comments

    • They seem to have revised Brisbane from +0.4 for september to -0.5 for september and then another -1.6 for october. That’s a big revision and a massive cliff.

      That would mean an average home in Brisbane lost over $200 a day in value through October (I know that’s a silly analysis, but give me some artistic licence)

      • But it’s a good way to put it Miss P. I try telling people about the dangers of negative equity and when I use language like “$800 a week leaking out through the floorboards” they start to get it.

    • yep, that’s a massive turn-around from +0.4 to -0.5, followed by -1.6 (unrevised) for October.

      I find the Sydney figures very hard to believe. Normally the revisions for Sydney are small, but this seems unlikely to me (based on Residex, AFG, and APM figures).

      • Diogenes the CynicMEMBER

        Does she still have credibility? Melbourne is one of the worst positioned cities in AUstralia in terms of stock on market, stock being built and other factors like unemployment.

      • “Does she still have credibility?”

        No, and yet The Age seems to quote her and Ms Cashmore at least once per week. Quoting “property experts” who provide not reasoning for their opinions is just another symptom of the demise of serious print journalism…

      • Monique Wakelin was one of the reasons I dumped my subscription to the Eureka report and starting realising that it was a waste of money and time.

        I was a subscriber to the Eureka report when Monique kept on saying that every good property will double every 7 to 10 years. People wrote in and argued and she always said as long as its a good property it will double as it has historically.

        I don’t waste my money on that twaddle now.

      • I just read her article. “People talking about property at dinner tables” is one of her signs that the market has bottomed?????

        It has been “trendy” to talk about property at dinner tables for about 5 years now. Everyone who thinks they are good try to talk about it. Look at the serial auction attenders in Melbourne who get dressed up just to go to an auction. (They love to appear to be rich middle class).

        Amazing how many people have been interested in “investing” in property in the last 5 years. (Or more). People talking about property has been a sign that its in fashion to borrow and buy. I don’t see how this is a sign the market will pick up.

      • Wasted OpportunitiesMEMBER

        Tasmanian Real Estate Trouble is back today with a good effort on this topic, holding the Tassie REIV to account for previous predictions about turning markets. Funny stuff.

  1. As the household ATM gets drained of personal savings, and with no top-up coming from enhanced property equity, austerity will bite at both ends of this downturn. Near-end; buyers will have reduced capacity to borrow and buy, as their net worth falls; Far-end; buyer will need some time of extended balance sheet repair before they have the confidence (or money!) to go back into previous ‘life-threatening’ levels of debt. The ,onger this melt goes on, the longer it will go on…

  2. How much are they down since the peak? Real and raw? I’m disappointed that despite record stock levels ,Melbourne isn’t falling more. Must be the frogs…

    • darklydrawlMEMBER

      Patience Phroneo,

      These things take time. Give it another 24 months and then see what you thing. Propery prices are like massive object, slow to move, but hard to stop once some momentum builds up in any given direction.

      It took 20 years of easy credit and economic growth to get up where they are now, they are not going to fall back to the mean in a month or two…

      • I think this sums it up best, its going to be a slow melt unless something causes a crash like a credit crunch or media blitz on negative equity.

    • Thanks for the replies guys. It’s quite a drop, and it would be even bigger in Melbourne. I know to be patient. After all, I’m planning on buying in 4-5 years so I shouldn’t be wishing for a massive fall too early on. Maybe it’s just me and my wishing that world leaders were forced to confront the problems of all this debt everywhere, rather than keep trying to kick the can. I wonder how much more affordable our leaders will allow homes to get before announcing some new affordability measures.

      • If the current Labour Govt can bring in a surplus prior to the next election they have a small chance of winning.
        If they bring in a deficit they have zero chance

        Any new affordability measure costs money. Our Fed Govt (and all state govts that are overly dependent on stamp duty) are in precious short supply of money.

        Given the current projected surplus is a mighty +1.5 billion (and that is with some optimistic numbers), the govt cannot afford any more FHB shenanigans.

      • ha, a plateau usually has a steep decline on the other side. Don’t they see the implication that if this is the plateau the down hill is going to be a lot worse.

        Oh RE jargon, you make me laugh…

      • darklydrawlMEMBER

        Yeah, “softening” always makes me laugh. Actually one of the folks on here made the comment awhile back how he no longer tell the kids he is reversing out of the driveway. He is ‘softening’ the car.

        hehehe… I still chuckle to myself about that comment when backing the car out some days 😉 nice one.

      • “This is your captain speaking passengers, an iceberg is softening the hull of the Titanic. No need to worries, carry on as usual.”