RP Data home price index for December

By Leith van Onselen

Please find below the RP Data December home price index press release which, for some reason, is still not available on their website.

Here are the key figures taken from the release. First, the change in dwelling values:

Note the -0.2% fall in raw (non-seasonally adjusted) capital city dwelling values and the -0.1% fall in raw regional values.

Second, here’s a chart showing the seasonally adjusted year on year change and decline from peak dwelling values by region:

Finally, below is a chart showing the combined monthly versus quarterly change in seasonally adjusted dwelling values:

RP Data Rismark Home Value Index Dec 30 2011

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Unconventional Economist

Comments

  1. The talking heads on WIN (Ch 9) Canberra today were talking up 2012 as ‘the year’ for Real Estate in the ACT. With rising stock, tough departmental budgets and a dearth of major construction projects, not sure how this is exactly suppose to occur.

    • Lol wait till 2013 in the ACT, the labor government will be crushed, half the public servants recruited over the past years will be laid off and many will need to sell as government jobs will dry up. 2012 is the year to sell up!

    • endrortsonhousing

      If you look closely at the Canberra data, house prices actually went backwards in November (which accords with what I have seen anecdotally – with clearance rates in the toilet and discounting appearing).

      What appears to have brought the figures up a bit is an extraordinary monthly rise of SIX PERCENT in Canberra apartments. This is probably the result of the release of some high end apartments – if basically nothing is selling and a handful of apartments go for $600k+, then in a small market like Canberra this will throw out the data. (A good reason to take a leaf out of MB’s approach and follow the trends based on more data).

  2. Do people not use logic at all when formulating their arguments…?

    It evades me how property is just going to magically go up when retailers and manufacturers are closing, the world is on the verge of recession and everyone is risk averse.

    And as much as property spruikers do my head in, I’ve also encountered my fair share of clowns from the other end too who believe property will drop %40 in the coming year…

    • Yes there are extremes on both sides Klogg, just be careful you don’t get labelled a “loony” for examining the risks of either …a 40% price increase in property is as devastating (read: destabilising) as a 40% crash…

        • +1 here too.

          Whenever friends and family discuss it, my argument is for basically a flat market for the next few years, with possibly more downside risk than upside risk.

        • I agree with the slow melt idea in general.

          However, given my home town of Brissie is down some 9% from the 2010 peak, I do not consider that to be a slow melt. ‘Terrifying’ I think would be the correct description if you were a heavily in debt, negatively geared specufestor with several mill stones, whoops, I mean ‘investment properties’ around you neck…

          • Yes BF totally agree and what will be interesting is that just because MSM and magazines have “Investor” on the title does not make you an Investor when you speculating on a ‘market’ to go up. Vis-a-vis housing!

            TM.

    • Logic is something that is not in over supply in the MSM. Hence that’s why I refer to them as reporters not journalists.

  3. We have a 2 speed economy with Sydney slap bang in the centre of the slow part. Why have their YOY values only dropped by 0.5% while the powerhouse of the Oz economy, Perth has dropped by almost 4%?

    Understand the reason for Melbourne dropping (accoring to MB bloggers too many houses/units for sale) and Brisbane still suffering from the floods.

    Also Canberra is in the supposed slow lane economy but its values have dropped by only 1.6%, the second best performer after Sydney.

    • I don’t fully buy the Brisbane is suffering from the floods line.

      I am in the market for a house and have looked at probably upwards of 40-none of which are anywhere near the flood areas.

      Everyone is pretty negative about property at the moment. There was a bounce at the very end of last year where a few contracts were signed but besides that there has been very very little movement.

      The whole vibe about the future and the economy and jobs etc etc is whats having the biggest effect.

      Even real estate agents are telling me that the prices were just not sustainable.

      Also the brisbane housing market was dropping BEFORE the floods-I think that they just formed a convenient scape goat.

      With a 9% drop from peak there must be some seriously underwater investors out there once costs are added.

      What does that make it in real terms 12-15%? Sounds pretty solid to me. I presume as people do their sums more and more people will realise the situation they are in.

      • Property was dropping in QLD long before the floods and was covered here.

        It was MSM excuse and it has been used to great effect with the sheeple.

        TM.

      • The flood is definitely a factor. A house that was flooded will have dropped considerably due to the flooding, and it will take years to recover the lost ground regardless of the state of the property market.

        That factor alone will ensure that Brisbane is the worst performing capital city unless Adelaide and Hobart suffer greater falls than I anticipate.

        Non flood affected homes in suburbs where the flood wasn’t a major threat should fare much better. Brisbane is also surrounded by areas that are performing badly due to external reasons, so that also drives down the market.

        Despite all of that negativity I still don’t expect major falls in Brisbane from now on, and rises in the short term are likely if we get additional rate cuts.

          • TM – No dispute from me on that, but the flood affects specific houses well beyond the general market effect, and that stays for many years. I should know – my home was flooded and I expect the price to be depressed by about $200,000 which will gradually be erased over about 5 to 10 years, but the recovery of the flood affected loss won’t start for at least two or three years.

            Others here can theorise as much as they like, but I’m literally on the coal face and I’m not misreading the effect.

    • Arguably, prices in Sydney were being supported by an influx of buyers attempting to make purchases before the expiration of the stamp duty exemptions on 31 December 2011.

      Sydney also didn’t experience the most recent price boom and housing supply has been restrained to a greater degree than the other states.

      • In other words, Sydney is just [email protected]#ked. Everything expensive, rents rising, prices stuck at staggeringly high levels, employment falling, state govt going into austerity mode, building approvals at multi decade lows, but at least we’ve got the Harbour…..

    • Sydney($2B) and Melbourne markets combined see approx $3B in property investment from Chinese investors. Take them out of the loop and Sydney would look like Perth.

  4. Going by the trends for the last few months, even the 0.1% SA headline growth is very likely to be revised down next month (the previous month was revised down by 0.1 percentage points as well).

    • I’ll be a bit more exact. Nothing against RP Data’s index – I really don’t think that they purposely have higher headline numbers then quietly revise downwards. In fact, they are quite transparent with their revisions, as they are reported openly in their PDFs (although not in their press releases!). Just wish that both MSM and RP Data/Rismark would note the revisions a bit more – e.g., still reporting the previous month’s headline figure, when a revision has occurred.

      Anyway…these are the cap cities only:
      Nov headline: -0.2% raw, 0.1% SA
      Nov revised: (see next month’s release)

      Oct headline: -0.2% raw, -0.5% SA
      Oct revised: -0.3% raw, -0.6% SA

      Sep headline: -0.2% raw, -0.2% SA
      Sep revised: -0.4% raw, -0.4% SA

      Aug headline: -0.1% raw, -0.4% SA
      Aug revised: -0.4% raw, -0.6% SA

      Jul headline: -0.9% raw, -0.6% SA
      Jul revised: -0.8% raw, -0.6% SA

      You get the picture.

      As a side note, Chris Joye’s focus on the SA numbers to provide evidence of a better market into 2012 is rather ironic, as earlier this year he recommended people discount the SA numbers and focus on the raw numbers (when the SA numbers were something like -2.0% MoM, and raw about -0.4% MoM).

      • That’s absolutely right booboo – I remember the line about discounting the s.a. number and the raw number being the “real” indicator of market conditions. I should see if I can find the quote…

        If I was being cynical I could suggest that they report both s.a. and raw data as that gives them double the odds of being able to report a positive number 🙂

  5. Anyone else read about Westpac’s dramatic property loan revision? Turns out that nearly $30 billion was classified as having be lent to owner-occupiers instead of investors. Luckily we have the best banks and regulators in the world and it only took them three years to figure out the error…

    http://www.theaustralian.com.au/business/financial-services/apra-angry-as-westpac-reclassifies-mortgages/story-fn91wd6x-1226235101393

    WESTPAC has infuriated the peak banking regulator and the opposition has called for an explanation after the bank revealed that it had incorrectly classified $28.8 billion in property loans for up to three years.

    Australia’s second-largest bank had been recording the loans as belonging to owner-occupiers since November 2008, when in fact they had been used for investment purposes.

    • As I’m currently doing some contract work in the technology area of a big 4 bank, I know how terrible their APRA reporting really is…

      They do the bare minimum to be able to show APRA that their reporting is up to scratch… (Even if their figures are way out!)

    • They’ll probably give themselves bonuses for reducing their exposure to the investment market.

  6. ceteris paribus

    I believe UE’s long-posed question still remains the central issue to watch in residential housing for the year 2012:

    “Slow stagnation” OR a “tipping point” for a significant leg down in prices?

  7. Ahh Westpac…

    Nothing like getting the ATO to refund some income tax to keep $14 billion insolvent ‘Owner occupier’… sorry ‘Investment loans’ current.

    At $600,000 per loan and scrambling for ideas to prevent them becoming 90 days past due (due to cashflow insufficiency), we now rope in the ATO’s cheque-book, the alternative is we are forced to flood the market with 23,000 mortgagee sales right at the same time RP-data announces the median price is $450,000 and declining ~ 3.5% p.a.

    Why do AFG keep reporting $396,500 average loans (and rising) at a 66.5% LVR, when the median price is $450,000 and falling.

    Refinancing is 37.8% of all loans????

  8. I would like to have your opinion as to the approach lenders might be taking is say the Brisbane FHB market and the Sydney FHB market.

    IMO there would be a vast difference and it may provide a view to the future of lending attitudes in other capitals as more stock comes online in the coming months.

    Also have noticed a ‘cargo cult’ mentality in Manly area, rumour of Swiss RE investors buying 3+ mill homes ‘unseen’. (so there is no need to worry)

    Sounds like B/S to me but allaying panic in the local population.

  9. FYI, where I live in Melbourne houses are selling for 100k less than they did in late 09. That translates to around 15% drop and no many buyers around and they only focus on better than average houses. Also rental properties seem to be vacant for longer but I have no quantitative info for rentals.

    • I find this site a little clunky but quite informative on the rental market.

      http://refindhouseprices.com/

      I’ve seen some new 2br apartments near me going with offers of a weeks free rent and $40/w discounts. I should do a light check one night. See how many might be occupied.