RP Data: House prices off lows in June

By Leith van Onselen

The RP Data-Rismark house price results for June are out and national capital city home values have clawed back around two-thirds of May’s losses, increasing 0.97% over the month.

A summary of the key results are provided in the below table:

The below chart shows the daily price movements by capital city since the beginning of the year:

As you can see, prices rose over the month in all major capitals with the exception of Adelaide. And after seven consecutive weeks of price falls between mid-April and end-June – where prices nationally fell by -2.1% – they have risen for four consecutive weeks, resulting in a cumulative -1.2% decline in values since mid-April.

Since the beginning of the year, prices nationally have fallen in all major capitals, with the exception of Sydney (+0.58%). Melbourne (-4.08%), has performed particularly badly not withstanding this month’s solid (+1.03%) rise in values:

Over the past 12-months, home price are down -3.79% nationally, with Melbourne (-6.57%) and Brisbane (-4.96%) leading the way and Sydney (1.97%) and Perth (-1.38%) holding-up better:

Following June’s increase in national capital city home values, dwelling values nationally have declined -6.5% since peak, led by Brisbane (-11.4%) and Melbourne (-9.6%), with Sydney (-4.0%) and Adelaide (-4.5%) holding-up better:

The next crucial piece of the house price jigsaw arrives in a few week’s time with the release of the Australian Bureau of Statistics housing finance data for May. Following the release of the Reserve Bank credit aggregates on Friday, which reported the equal second weakest growth in nominal housing credit on record, we are expecting another subdued result, which will, other things equal, imply that June’s recovery in national capital city home values will lose momentum.

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Comments

  1. Ridiculous how this increase in housing costs is being reported as positive in the media. Why don’t we all celebrate food and everything else going up in cost due to the carbon tax? It is such behavior that makes me so blase about recession-linked suffering.

    And that’s what it will lead to. The longer house prices stay up the worse the crash it will be as it means more and more people will be buying in at near-peak levels. So when deterioration resumes, more will suffer and be left in the red.

  2. It’s onwards and upwards once again! Only joking – but in Melbourne, it could be the ‘Block effect’, where Brad & Lara’s house sold for over $500K over the reserve! Me thinks that some insider shenanigans took place to make sure that the properties sold and did they ever sell with all 4 couples getting huge amounts over the reserves. Can it be sustained? – a blip in the slow glacial melt.

        • Definitely lots of gullible people out there, as the inflated Australian property scam would not have gone on for so long. However UE, the actual ‘real market reserve’ would have been around $1.3 million, so to make over $300K over that is quite something. Channel 9 obviously vetted buyers and had incentives like that for ‘marketing, like the strange ‘Energy Watch’ fellow.

          • They failed to recover costs. Is it quite something? You do that often enough as a developer and a guy in a blue uniform shows up on your doorstep to repossess a few things. Here in Vic anyway.

          • i only saw 1 auction of the block, the one with the energy watch guy.

            i noticed how all the contestants, auctioneer, and hosts said the words ‘energy watch’ at some point.

            would be interesting to see how much they paid for that, and the pay structure. possibly amount of time the t shirt was on camera + the number of times people said the name.

        • Mining BoganMEMBER

          But it sells the dream. I received a phone call this morning about the auction from a friend in Melbourne. She was so excited. She wants to be a contestant the show. Her existence will never be complete until she owns her own home.

          She’ll never get there. Her hubby still hasn’t realised that pulling four cones before breakfast doesn’t get a job that will pay off a million dollar McMansion. But this is how the dream works. The further away from it you are, the more desirable it gets. It becomes hypnotic. That’s why I despise these shows.

          Hypnotic McMansions. Good name for a band.

      • outsidetrader

        Exactly – when the opening bid comes in more than $200k above the reserve then that’s a pretty good indication that it’s an unrealistic reserve. Though that’s not how the MSM is reporting things…

        I’d be pretty frustrated if I was one of the teams from last season, who all put in just as much work but were completely screwed over by reserves that were equally unrealistic in the other direction…

    • Cognitive Dissonance

      Well I went to bed giddy about the thought of a quick 300 to 500k from RE…..suspicious too, that first auction was more like a auction on TV that was based on a romance novel about a much larger story…..not the sort of thing you generally get to see on a Saturday morning standing on a kerb

    • The block is a joke. This season was walking distance from work and I can tell you, the number of contractors they have on it is crazy. Of course, you don’t see them after editing. It’s all made to look as though the contestants are doing everything when in reality they are probably given some routine apprentice job at best.

      I watched the end of a previous season (think it was the last one) and the most I remember of it is laughing when contestants didn’t make any money. Cruel thinking I know but, as stated by others, this kind of show sells nothing but a debt ridden fantasy.

      $500k over the reserve, what a joke.

  3. I dont think we can talk about a recovery or even stabilisation in Melbourne given the low clearance rates and rising stock levels. This surely shows the rate cuts have not transferred to increased demand in the market – ultimately the oversupply will continue to suppress prices until the stock is cleared. So how do we explain the rise?? a blip perhaps? maybe some are trying to get the state grants b4 expiry? Dont know myself, but at 2-3% net yields and little prospect of decent growth, Melbourne property remains a terrible investment.

    • All financial assets have variance. The trend is clearly down.

      Besides, the number of people I work with who still think property is a fool proof investment is ridiculous. Many think that recent price drops are a GREAT reason to invest.

  4. Its all unicorns and rainbows over here

    Guess what? Contrary to the silly claims of some, Australian house prices are not falling through the floor. In fact, Aussie dwelling prices surged back by a surprisingly strong 1% in the month of June assisted by a tail-wind in the form of the RBA’s generous rate cuts over the preceding 60 days. And these gains (not losses) were experienced by around 90% of the nation’s capital city owners.

    etc.

      • lol. the criteria is increasingly amorphous. suspect it is the poster, not the linkee – CJ has had much good sensible stuff to say on the media debate.

        • If you are so impressed by CJ, why don’t you leave us alone, go to his blog to comment/astroturf.

          Oh wait.. you can’t. He has disabled commenting.