R.P.Data’s quarterly newsletter

Find below R.P.Data’s quarterly newsletter which came with their latest update along with this tantalizing tid bit:

The RP Data-Rismark Home Value Index results for October 2011 will be released on Wednesday of next week. The results, which will reflect market conditions pre-rate drop, are likely to see a continuation in the weak trend that has been evident since the start of the year, however recent months have seen value declines levelling. In October, consumer confidence was still low, together with a high volume of stock available for sale, low auction clearance rates and interest rates at an above average level which suggests more of the same conditions. Given that October was the last month in which official interest rates were at 4.75% before the 25 basis point cut in November, the next few months of data will be interesting to analyse to see if volumes or values show any improvement.

Front running their own data with some pre-gloom. Looks like it might be a rough number.

Quarterly Review NOV11[1]

Comments

  1. “. The results, which will reflect market conditions pre-rate drop…” The RBA didn’t drop rates because ‘all was well’ in the economy….or the real estate market! When will it dawn on the masses, ‘the lower rates go, the worse things are’.

  2. “.. the next few months of data will be interesting to analyse to see if …values show any improvement” Values WILL show an improvement, but mainly beacause prices will have fallen.Interest rate falls don’t reveal ‘value’, the expose the false value that was existant previously.

  3. “interest rates at an above average level”

    Umm…what? Hasn’t the average IR over time been something like 7%? Do RP consider ZIRP to be the standard or something?

  4. Macster
    November 25, 2011 at 4:54 pm

    “interest rates at an above average level”

    Exactly! RAT interest rates are zero to negative. How negative do we have to go to keep this farce going? Negative interest rates hardly promote wise investment (or spending/saving)decisions!

  5. Interesting that they removed the sales listings chart from the November 2011 report, and replaced it with the “Australian capital city effective housing supply” chart on page 5. What’s odd is that RP Data’s capital city sales listings are up about 29% from last year (at 23/10/2011) – but the effective housing supply chart implies supply is roughly the same as last year’s peak. Hmm.

    Other than that the take aways are Hobart’s 3 month plunge plus Sydney/Canberra not propping up the national figures any more.

    My guess is (like last time) the RBA rate cut will do more for vendors’ market confidence than buyers – with turnover, auction clearance rates and vendor discounting taking a tumble.

  6. Political correctness owns RE:

    Just finished reading 22 pages that should have been 5 at best. Gawd, the Government is missing some top passive voice writers here.

    “bringing rates back to a more normal setting” as compared to less normal?
    “market conditions will remain soft” – hard conditions being good?
    “vendors have not yet adjusted their
    price expectations” – wow – that is a hard way to say not drop their prices
    “conditions don’t seem as rosy” – maybe more petunia?
    “buyer demand remains relatively sedate” – more coffee!
    “markets are likely to continue to be weighed
    down by poor consumer and business sentiment,” – sheesh – if that’s all it is then lets get Corey Delaney to organise some parties

    and my favourite “Vendor discounting – buyers are negotiating harder” – and its about time too, glad we buyers finally grew some bigger kahunas

  7. Our dollar will plummet like a stone if there are too many more rate cuts to prop up a saggy domestic property market. That might not be a bad thing – domestic manufacturing is crying out for a bit of air but on the flip side our high dollar has insulated us from high oil prices.

    Property prices have been out of the reach of many people for a long time… it’s stupid to think that we have this historically unprecedented price gouge and government basically ignored it.

  8. dumb_non_economist

    Can someone please answer this question on how the median price and house price % rise/fall is arrived at. Approx 2008 Perth was just about to pip Sydney at the post for the highest median price in the country. On the above figures Syd is sitting at $550K and Perth at $450k, which would imply a 20% drop in the median price for Perth. The data states Perth having fallen around 13%, so how are these figures bastardized?

    • I’m guessing the “missing” 7% would most likely be accounted for by a rise in Sydney’s values over that same period.

      What was the median for Perth in 2008? Once you know what that was you can see if the drop was the 13% RP have stated.

      Comparing to a moving target of Sydney’s values will not give you the % drop in absolute terms, only in relative terms.

      • dumb_non_economist

        Thanks boyracer,

        Going by memory, I thought Perth was around the $540k mark in 2008 and that Sydney hadn’t moved that much since then, but I’ve just found out it depends on who’s figures your using, huge differences! I googled Perth Median Prices 2008 and rs.Realestate.com.au stated the the most recent Perth median as (2011) as $705K and 2008 $745K compared to RP Data’s Nov 2011 of $455k!!

        I thought quoted medians would be close and any differences would be minor as they would be measuring the same data!

      • That’s a pretty hefty difference in quoted medians! For what it’s worth REIWA seem to be closer to RP’s medians prices.

        I had a quick look and according to the ABS Perth medians dropped 6.7% over 2008 so that might be the missing 7% also.

        So it would depend on which 2008 median price RP were comparing to – the peak/bottom of 2008 or some combination of the two.