RPData market update

RPData‘s Australian housing market update for November ( looking at September data ) came out late this week. I recommend watching the entire video, but if you are pressed for time or are only interested in one market then Sydney is @4:10, Melbourne is @ 5:32, Brisbane is @6:50, Adelaide is @8:50 ,Perth is @ 9:58, Darwin is @ 11:18, Canberra is @12:12, Hobart is @13:20.

There isn’t much new information in the video over what I have already covered from RPData this month ( here and here ), but as you usual the video is very informative and well worth watching. A couple of charts in the video did catch my eye. Firstly the decline from peak chart which shows that Hobart and Brisbane are still in the lead,  however you will notice that Melbourne is playing catch up.

The other chart of interest is the ‘stock on market’ which backs up the national trend we saw from SQM research this week.

Enjoy the rest of your weekend!

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  1. Wow, the national stock on the market figures (including the regions) did exceed 300k after all. Compare that to late 2008 when a peak of around 240k or so saw property prices starting to fall.

    Also interesting is that the amount of new stock coming onto the market is around the same as previous years – meaning its a slump in sales that’s causing sales listing to rise.

    Seasonally listing should jump further into December. If national sales listings are still over 300k in February/March then vendor sentiment’s going to get a kicking. The AFG numbers indicate some increase in FHBs in the market, but unless that continues demand at current prices is nowhere near sufficient to turn things around.

  2. “Wow, the national stock on the market figures (including the regions) did exceed 300k after all. Compare that to late 2008 when a peak of around 240k or so saw property prices starting to fall.”

    Would that explain why we saw a
    breathlessly limp property spruiking piece on ABC news (NSW) tonight?
    Things must be getting bad.

    Even CJ made an appearance as Stimpson J Cat.

  3. It is interesting to see that new listings are actually quite static. They are just no longer selling.

    • They are no longer selling because vendors expectations are just too high, the banks wont lend the amount that vendors want and will only loan what they perceive as the true value of the property and buyers just do not have enough income/savings to put towards a house and why spend three grand a month on a mortgage when you know fine well that the property will be around 30-50 grand cheaper next year. You might as well rent at around fifteen hundred a month and keep saving. Property will only really start to sell when the cost of a mortgage is around the price of renting or wages increase considerably.

  4. the rate of decline in hobart is as fast as any of the bubbles that have burst around in the world in the first year. at this rate half of all gains in last ten years will be wiped out in three. RE bubble has popped conclusively. my friends are going to hate me, for years i was the crackpot still renting (albeit a place with 180 degree views of water, polished floorboards, euro kitchen and bathroom, hot tub in backyard etc–all for 260/week in beachside suburb of hobart). now i am the smug arsehole who will pay cash for a house at half price in 3 years. reality is a b*tch.

  5. How is the average vendor discount calculated? Is it the difference between the advertised price and the actual selling price?

    • I have also wondered if it was the first advertised price or the last advertised price against selling price …

    • i will keep my eyes open for those numbers. i think tassie could end up the florida/california etc of australia. everyone is talking about melbourne but i think tassie will beat them all.

  6. really nothing new in this article, but being a cynic what advantage has prd putting this in the press… maybe to go and beat up their vendors to reduce their expectations, up the turn over.

    • “being a cynic what advantage has prd putting this in the press”

      The obvious reason.

      From the front page of their web site:

      “RP Data is the # 1 provider of property information, analytics and risk management services”

      All of those things are even more valuable in a falling market.

      Follow the money…

  7. An excellent report with a lot of real data.

    Much as expected with Brisbane and Perth to lead out of the price falls in the near future, Sydney to show modest falls, and Melbourne to experience larger falls, perhaps the worst falls of all capital cities.


  8. Nationally-advertised properties have certainly kicked up a notch in the last twelve months. I wonder if banks are under pressure to get new loans now since people are so weary of buying at the moment (or maybe they just can’t stretch the budget any further than it already is?). Sydney has been fairly stable – is that because they already experienced some levelling out beginning around five years ago? Very interesting anyway, thanks a lot for posting this.

    • “Sydney has been fairly stable – is that because they already experienced some levelling out beginning around five years ago?”

      My partner thinks it’s because Sydney is a nice city, especially when compared to the ineffably lame Melbourne (not my comments or feeling).

      I think it’s for the very reason you mention.

      See UE’s Sydney Housing Valuation Report (http://www.macrobusiness.com.au/2011/10/the-sydney-housing-valuation-report/).

      There’s a graph in there comparing Sydney’s house price growth to the national average since 1987. I quote, “Sydney’s housing market out-performed the national average up until 2004, but has significantly underperformed for much of the period since.”

      Rental yields are better too. And constructions rates are lower.

      I’m sure the Harbour and beaches are entirely incidental…

      • As per UEs Sydney report, there may actually be a genuine shortage here now.

        02-05 there was a bit of a supply response, not to mention enough internal migration to other states to drag the population growth down to near zero one year, but since then, not much building activity at all, and is declining in the face of still very high prices. Then there was that boom in international migrants who tend to choose the harbour city to settle in, so any glut has been used up by now.

        Sydney is a nice city if you earn $100k+, can afford to live in a harbour or beachside area, and/or bought 15-20 years ago. For everyone else, it’s very expensive, congested, and mostly very ordinary to live in.

      • I’d say it is due to Sydney actually having a structural undersupply.

        The rest have what is now obvisouly an oversupply, but not so Sydney.

        But again it is irrational to price that in for ‘investment’, unless you can promote an eternal undersupply, then this shortage premium can only dissipate

  9. A few questions came to mind.

    1) Was Melbourne peak really Dec 2010? I thought the market peaked in Q1 of 2010. That would affect the peak to decline.

    2) Average days on the market until what? A sale? / Withdrawal? / Re-listed under another agent/ Rented out instead of sold?

    • Yes the peak was April – May 2010.I think there was an interest rate around that time. That flattened the market and from then on has been a slow decline.

  10. The answer for 2 I imagine would be All Of The Above plus any other reason a property gets pulled from the market.

      • But is doesn’t make any sense then. If this is a report of market conditions re property sales, it should be reporting average days on the market until a sale, shouldn’t it?

        • I agree Goldilocks, it should. But we’re not talking about a completely honest industry whos interest is to provide unwashed facts, even if it goes against their interests, now are we?

          It’s the same as auction rates where the stats are regularly fudged.

  11. 14 out of 40 properties were sold at auction yesterday according to the Canberra Sunday Times with most in the high end bracket. Is this a reflection of the current state of wage negotiations with the APS? The SES are enjoying big rises while the APS are only being offered 3%. Keeping an eye on the future market; we’ve been told “If you think things are tough now….”

    • Johnno I think the top end of the market in Canberra is the one that is struggling the most. Greater Gungahlin is also struggling but because of oversupply issues. I also saw the Sunday article and I wouldn’t read too much into them – should you read into any news article, especially the Canberra Times! I was actually at the auction in the photograph – we currently live nearby so went along to see what happened. Firstly, there weren’t 120 people at the auction, more like 40-50, so a gross overestimate. I also doubt if there were 70 separate groups who inspected the property. It was also interesting to hear the agent and auctioneer manufacture land values out of her head. The current land value is just over 500K and at the start of the auction, she said that the block would be worth over 700 or 800K. Why do we have land unimproved land values when the agents will simply make their own up to spruik up a property. I have seen this, probably highly illegal tactic, used more frequently recently. In my opinion, this supports the fact that times are tough for agents and sellers, and they need to pull out all the rabbits they can. In the article, they claimed that the price achieved was under the reserve but the buyer did not get a bargain at $1.28 million!