APM: House prices lifted in June quarter

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By Leith van Onselen

Australian Property Monitors (APM) has released its June quarter house and unit price results (below), which recorded a 2.8% increase in house prices over the quarter at the national capital city level, and a 2.0% rise 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 5.0% over the quarter. Perth (+3.2%), Sydney (+2.7%), and Canberra (+1.8%) also recorded solid gains, whereas prices fell in Darwin (-2.1%) and Hobart’s median price was flat.

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It should be noted, however, that some of the reported price movements were caused by revisions to theΒ  prior quarter, which particularly affected Melbourne’s result. The median price changes excluding revisions are shown below:Β 

  • Sydney: 2.4%
  • Melbourne: 2.7%
  • Brisbane: 0.4%
  • Perth: 3.4%
  • Adelaide: 1.8%
  • Hobart: 2.8%
  • Canberra: 1.5%
  • Darwin: -1.9%
  • National: 2.3%

Nevertheless, according to APM, prices set new all-time highs in nominal terms (still down in real inflation-adjusted terms) in Sydney and Perth.

Unit price performance was mixed. Melbourne (+3.7%), Perth (+2.5%), Sydney (+2.4%), and Adelaide (+1.2%) all recorded solid gains, whereas Hobart (-7.3%), Brisbane (-2.4%), and Canberra (-1.3%) recorded losses.

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Again, results excluding revisions to the March quarter are shown below:

  • Sydney: 3.8%
  • Melbourne: 2.4%
  • Brisbane: 0.2%
  • Perth: 4.1%
  • Adelaide: -0.2%
  • Hobart: -6.5%
  • Canberra: 2.9%
  • Darwin: 0.2%
  • National: 2.4%

APM uses a similar stratified median methodology to the Australian Bureau of Statistics (ABS), which suggests that the ABS will also record growth nationally when its house price index is released early next month (although the two series do often diverge).

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APM House Price Report (June 2013)

Leith van Onselen
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Comments

  1. reusachtigeMEMBER

    This is great news for investors wishing to achieve higher profits when they sell.
    .
    Let’s hope interest rates continue to fall. This will help encourage new people to get some skin in the game and allow those courageous investors at the top of the ladder to offload their investments to the smart new starters at even higher prices thus increasing profits further.
    .
    Australian Housing – serves no other purpose than a road to riches. And so it shall be …

    • This is great news for investors wishing to achieve higher profits when they sell.

      Not if FHBs are forced to withdraw from the market and investors are selling houses to each other..

      Dam, buy now before it is too late; before other investors jump in and get ahead of you πŸ™‚

      • Yes it s a great time, I just bough my PPOR i ll have to wait a bit, but I hope to be able to invest before the FHB rush, as if they decide to get into the market as one, they could totally price me out of good deals.This would be unfortunate.

    • Their other option is to refinance and draw down on the untaxed unearned equity-mate and buy another. How I would love the ATO to acknowledge a financial benefit has been derived at the refinance event and apply the appropriate tax… Retrospective assessments since 2000 would also be most welcome.

    • Hi reusachtige,I’m glad I have been reading all your previous comments otherwise I would be listing my CDs and clothes on EBay to raise a deposit….

      • @reusachtige

        Thank you I feel vindicated, at least my hard work has not been lost on everyone, you got it and be a happy home owner very soon, enjoying home improvement tv shows with you wife&kids.

        what a reward.

  2. Is this price action enough for the RBA to loosen their grip on the interest rate lever in August?

    As the growth in asset prices is a key metric in their debt driven universe but they are also keen not to kill the gift that keeps on giving ( like they almost did during 1998-2006), at some point rising house prices will jam their continuing use of the interest rate lever.

    They may find themselves with the nasty combination of higher house prices and new housing construction unresponsive to falling interest rates.

    Hmmmm, that sounds familiar.

    • The Patrician

      +1 Record low interest rates fuelling house price inflation and petrol price inflation…and the doves cry for more…more lead weight in the saddle bags of Australian competitiveness and productivity

      • Baloney! Low interest rates only mean more money for everyone and an easier life. As per Reus we’ll all be rich with houses worth at least multi-millions.
        Any problem at all rates that are even more negative RAT will fix it.
        What could possibly go wrong?

      • flawse variable interest rates are exactly where they were all through the fifties and most of the sixties post WW2.

        If they were not abnormal then why are they abnormal now?

      • It was a totally different era. Interest rates were held below equilibrium rates through a system of credit rationing.

        Should we also bring back 50’s & 60’s style credit rationing? I suppose we should. Whats good for the goose…

      • Yes it was a different banking system but that isn’t reason in itself for high rates or credit rationing.

      • +1 sweeper, you nailed it. PF wants to have his cake (credit bubble) and eat it too (low interest rates).

      • Yes – rationing had a part to play in combination with the closer proximity of the 1950s and 1960s to the last great experiment in excessive leverage – the 1920s and 30s followed by the consumer confidence wonderland of the 1940s.

        An appreciation of the power and pitfalls of debt is a generational thing – it often takes a lot of fingers getting burnt for a new generation to get the message.

        With the banking system (aided by the RBA) now selling debt like hamburgers and grog it can be hard for many people to detect the smell of their own flesh burning.

    • IMO it’s a greater achievement when MSM journalists get quoted here (for their quality work, rather than dissection of where they went wrong) πŸ˜‰

      • Yes, my comment really should have been – “Nice quote Leith.” Kind of destroys the massive Melbourne price rise implication of the article.

  3. We must also remember that the Victorian first home buyers grant expired on 30 June so an uptick is expected this quarter as the mugs all jumped into the market to pick up their free money.

    We will see if the Melbourne growth is sustainable in a post grant market. I doubt it.

    • Melbourne’s auction clearance rates,prices and volumes, since 30 June, remain well up on this time last year.
      The 50+yr low cash rate continues to fuel the fire.

    • I dont think it actually expired, I am sure that the seven grand for established property was withdrawn and the seven grand was increased to ten grand for new homes.

  4. Wakey, wakey, Janet. The RBNZ Governor has something to tell you….”Wheeler ( this morning) shied away from any hint of whether the bank will move to use macro-prudential tools to try and limit high loan-to-value ratio lending on housing”
    I repeat. Wake me up if anything ever does happen…..(1.14 looking ever closer, Greg!)

  5. PrinceOfPersia

    Gee the Chinese investors are doing a good job. But I wonder for how long would they keep investing here in OZ.?! They are pretty much buying everything that comes to the market, but even they have a limit 

    However, with the interest rate among the lowest in the developed countries, we were expecting much higher price increases! LOL.

    • “but even they have a limit”

      Are you kidding? They are almost infinite compared to our population and available house stocks.

      • Check the features. It must be the “Internal Laundry” if you know what I mean πŸ™‚

      • reusachtigeMEMBER

        You too could get rich off housing, you just need to get some skin in the game now! Rates will never be this low again, they will be lower!! It helps make the economy go!!!

  6. You people are in denial. They can easily make house prices stay at the levels they are via mass immigration.

    • We need to be trained as migration agents to coupe with the demand for such mass immigration. Two booming industries that will bring down the UE rate. Realestate and migration agents. All problems solved!

    • Bluebird
      With three anti-population growth parties now running in the upcoming election, I do not think the public are going to accept high immigration, while they ignore emigration.

      • We’ll see. Hopefully the Stable Population Party will succeed and stop the madness. But I suspect most bogans still think the Libs are anti immigration.

      • Looking at Labor’s recent policy I think it’s all window dressing Willy. The proof will be in the pudding, but judging by the mass local advertising and warnings, it’s a farcical, vote buying stunt most probably the strategy of all parties contesting.

    • reusachtigeMEMBER

      An immigration / real estate agent … a career made of gold and supported by the true powers that be! Stormtroopers.

  7. Guys, hate to be the bearer of bad news but…. APM’s data doesn’t seem to agree with their own….um….data.

    For example, this time last year they were reporting Canberra median of $575,825 (implying a YoY growth of 0.07%).

    But wait, now they’re saying that in June 2012 it was actually $553k, soooo that’ll be growth of 4.2%.

    Similar fudging of figures continues throughout the good Doc’s figures…

    • This is driving me crazy, what are is the actual YoY increase for Melbourne?

      Does anyone have last years released figures from APM?

      I really don’t get it, but it looks like fudged figures from REIV and APM in a blatant attempt to manipulate the market. Am I wrong about this?

      Imagine if this was done to the sharemarket, it’s absurd.

      • Give this one a go:

        http://www.domain.com.au/content/files/apm/reports/Jun12-Qtr-HousePriceReport-FINAL.pdf

        I’ve started keeping copies of the figures released from the various agencies as I discovered about a year ago that history was being manipulated to give the impression that the only way is up. I have data sets back to mid 2010, with the most accountable being Rismark (they tend to stick to their statements).

        And yes, it is ridiculous. But fortunately for the property marketeers property is not a financially regulated product, so being able to stand by your claims (and take personal responsibility and liability) is not an issue.

        Doc Wilson has evidently not worked out that you will be remembered for not only what you do throughout life, but how you do it.

        Shame on him.

        In 30 years time it’s going to be dodgy data sets like this that define him.

  8. Thanks heaps.

    So whilst this year they report
    Melbourne’s median for June 2012 being
    $521,410, last year they reported $531,167.

    If we use last years figure, and compare against June 2013, we arrive at:
    553,447/531,167 – 1 = 4.19% Increase

    This is on the high-end, but is inline with previous figures of about 3.4 – 3.8%.

    They may have bumped up the June 2013 figures, we will find out next year.

    But FHOB’s shouldn’t be in a panic, so long as they keep saving.

    Thanks for that!