APM: House prices up, units prices down

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By Leith van Onselen

Australian Property Monitors (APM) has released its March quarter house and unit price results (below), which recorded a 1.7% increase in house prices over the quarter at the national capital city level, but a -0.7% fall in national capital city unit prices.

In the year to March 2013, APM recorded a 3.2% increase in national capital city house prices, but only a 0.7% rise in unit values.

Looking at the capital city breakdown, you can see that Melbourne led house price growth, with prices jumping by 3.6% over the quarter. Darwin (+1.8%), Sydney (+1.6%), and Perth (+1.3%) also recorded solid gains, whereas prices in Adelaide (-0.8%) and Canberra (-0.4%) fell over the quarter.

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It should be noted, however, that some of Melbourne’s reported strong house price growth was caused by a -1.1% downward revision to the prior quarter’s result, without which Melbourne would have printed 2.4% growth over the quarter.

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Unit price performance was mixed. Darwin (+3.6%) and Melbourne (+2.6%) reported particularly strong unit price growth over the quarter, whereas significant falls were recorded in Hobart (-5.0%), Canberra (-3.5%), Brisbane (-3.3%), Sydney (-1.6%), and Adelaide (-1.1%). The strong price growth in Melbourne, in particular, seems counter-intuitive, given the large amount of apartments under construction or recently completed.

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It should also be noted that part of the weakness in unit prices was caused by upward revisions to the December quarter’s results, without which unit prices nationally would have been flat.

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APM uses a similar stratified median methodology to the Australian Bureau of Statistics (ABS), suggesting that the ABS will also record some growth nationally when its house price index is released early next month.

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APM House Price Report (March QTR 2013) FINAL-1

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.