Cross posted with permission from Capital Appreciation’s blog
After several months in the wilderness, allhomes have begun publishing their short- and medium-term ACT real estate market trends again. Median house and unit prices are some of the data published by allhomes and I thought I’d take the opportunity in this post to reproduce some of these data below.
Although allhomes do not specify how they calculated or where they obtained the median price data, it does appear that they are raw medians that are likely to have been calculated from full residential property sales transactions in the ACT and/or sales prices supplied by real estate agents. In the charts below I’ve used both current available data and archived data to produce trends in median property prices over a longer period of time than the current allhomes website shows.
Above is a chart of the annual ACT median house and unit prices between 1991 and 2012 (part year). The chart shows that median house and unit prices have more or less quadrupled in that time. The percentage gain between 1991 and 2011 was 326% for houses and 268% for units. No wonder some Canberra investors believe that property prices never go down.
However, the chart clearly shows the property price correction in Canberra in the mid 1990s. Between 1994 and 1996, median house prices dropped just over $10,000 and units dropped $7,000 in Canberra. John Howard’s ascension to Prime Minister in 1996 and the subsequent slashing of thousands of public servant jobs is often quoted as a major reason for the drop in house Canberra property prices in the mid 1990s. However, it appears prices were dropping towards the end of Paul Keating’s reign as well.
The second chart shows the monthly ACT median house and unit prices between June 2010 and January 2012. Unfortunately I couldn’t get a longer complete set of the monthly medians from the archived allhomes websites. Monthly median house prices declined during 2011, although the two most recent dates (Dec 2011 and Jan 2012) show a slight rise. Monthly median unit prices are more variable, probably as a result of fewer monthly sales and monthly spikes where there were more sales of new unit developments.
The first chart above shows the number of annual house and unit sales transactions in the ACT. The years recording high numbers of transactions tend to be the years when ACT median property prices recorded the greatest increases. Similarly the low volume years in the mid 1990s, 2004-2006, and 2008-2009 were the years that generally recorded negative or little median price growth. Also, note the increase in unit transactions, which is not surprising given the number of new unit complexes built in Canberra in recent times.
Please note that the data for 2012 are projected based on sales volumes so far in 2012 so it’s still too early to tell if 2012 will be another down year for property sales.
The next chart shows the monthly sales transactions between June 2010 and January 2012. Unfortunately I couldn’t get a longer complete set of the monthly medians from the archived allhomes websites. I was surprising by how strong the sales were in June 2010 and May 2011, when you could reasonably expect most sales in Canberra to occur in the warmer months.
This winter sales transaction spike was also evident in the older allhomes data for the years 2002, 2007 and 2008. Although 2011 recorded a lower number of sales transactions than 2010, the second half (July-December) of 2011 recorded nearly 900 more sales (4415) than the second half of 2010 (3519).
Also interesting is the relatively strong start to sales in January 2012, which I expect has slowed since. The allhomes website is showing the sales numbers for February but these look too low and are likely to be upwardly revised as further sales data come in.
Annual sales transactions by value more or less mirror the volume chart and clearly show the boom years from the gloom years. Again, the number for 2012 is a projection based on limited data. If 2012 does prove to be a down year, there will be a lot of real estate agents and one ACT government wondering where all the money has gone.
Monthly sales transactions by value also mirror the volume chart. Again, a higher value of sales ($473 million) was recorded in the second half of 2011 than the second half of 2010. The first half of 2010 was clearly going gangbusters.
Hopefully allhomes keep providing these data as they provide a valuable gauge of the state of the ACT real estate market. It would be nice if they provided some further information on where the data come from.
So are we about to see a similar decline as the mid 1990s? The political environment is shaping up similarly so will 2013-2014 be the best years to buy or are we in for greater declines because property prices are too high?