Morning Money's view

Morning Money publishes a newsletter encouraging people to buy stocks and gold, and is adverse to investment in real estate in Australia. From a recent newsletter (not that I necessarily agree):

"we’d been invited to appear at a housing debate in June. According to the organiser of the event, there will be six people on the panel. On the housing-bubble side will be Professor Steve Keen from the University of Western Sydney, David Collyer from Prosper – the group organising the buyers’ strike – and your editor.

On the no-housing-bubble side will be AMP economist Dr. Shane Oliver, Mr. Harley Dale from the Housing Industry Association, and Mr. Christopher Joye from property index firm Rismark.

We’ve been told the date to pencil in is 7 June. When more details are available you’ll read about it here.

We’re looking forward to the debate for a number of reasons. But most of all we’re looking forward to the property bulls providing some original arguments.

It’s boring combatting the same old tired excuses. We’ve bashed down each argument as they’ve made it. Now their only option is to recycle the same old trash and hope they can get away with it.

I mean, after spending the past two years denying a house price crash was possible under any circumstances, we’d like to hear them explain the situation in Queensland. After all, they never made any distinction between Queensland and the rest of Australia...

If anything, Queensland was compared to Western Australia as a safe place to buy due to the resources boom.

But according to the Courier Mail article sent to us by Money Morning reader Bill:

“Housing slump falls to 2000 levels as access to finance cuts construction”

And don’t even think about blaming the slump on the floods. As many spruikers now admit, the Queensland property market has been dead for two years... not that they admitted it until recently."

Does the RBA think there is a bubble in the housing market in Australia?

Actually, for the past year or two, house prices haven’t done anything much at all. They’re up in some parts of the country, down in others and, interestingly enough, the two regions where house prices have been weakest are Queensland and WA. Given the nature of the resources boom that’s building up, it’s hard to believe that they’re going to see chronic weakness over a long time. I think the story for recent weakness is probably that they’ve got some indigestion as a result of the previous upswing.

But, as we see that unfold, we continue to see arrears rates on mortgages very low by global standards – 50 or 60 basis points. ...

So, you know, that’s probably not top of my list of worries. I think there are significant issues to do with housing values, but I think they are as much social, really, as economic, and I won’t go into that today; there’s not time. But I think – the other thing I’ll say is that it’s quite often quoted very high ratios of price to income for Australia, but if you get the broadest measures, a country-wide price and a country-wide measure of income, the radio it about 4.5 and it hasn’t moved much either way for 10 years. And that is higher than it used to be, but it’s actually not exceptional by a global standard as far as I can see.

Quote above is from Governor of the Reserve Bank of Australia, Glenn Stevens, in London in March 2011, when asked if Australian residential housing was a bubble. He should know. Commentary by Chris Joye here.

Housing Flat in February - almost no growth over past year

From RP Data Press Release today:

"February's index result (0.0 per cent s.a.) suggests that Aussie home values continue to tread water despite robust household income growth. There was little revision to RP Data-Rismark's January estimates.

After a natural disaster-affected January (-1.5 per cent seasonally-adjusted or -0.7 per cent raw), RP Data-Rismark's Hedonic Index reports that Australian home values held ground during the month of February.

In the capital cities, RP Data-Rismark recorded flat dwelling values (0.0 per cent seasonally-adjusted or a slightly stronger +0.7 per cent in actual 'raw' terms). The 'rest of state' areas, which account for the 40 per cent of homes not located in the capitals, also displayed some improvement during February with house values rising by 0.5 per cent seasonally-adjusted (+0.3 per cent raw).

Over the 12 months to end February, Australia's capital city home values have hardly moved, rising by only 0.8 per cent. The story is the same in the rest of state regions, where home values remain unchanged (-0.2 per cent) over the last year.

In the property investment market, RP Data-Rismark estimate that gross apartment and detached house yields were 4.8 per cent and 4.2 per cent, respectively, in February. Darwin (5.7 per cent), Canberra (5.3 per cent), Sydney (5.1 per cent) and Brisbane (5.1 per cent) all offer reasonable rental yields in the apartment market. Melbourne is the laggard at 4.2 per cent. ...

A (near) double interest rate hike in November 2010 combined with numerous natural disasters has conspired to make the last three months difficult ones for Australia's housing market. ... While the weakness has been evidenced right across the nation, it has been especially acute in Darwin (-9.0 per cent) and the two resource-centric capitals, Brisbane (-3.3 per cent) and Perth (-1.9 per cent).

"Recent RBA analysis also shows that repossessions have been highest in Perth and South East Queensland, which helps explain the poor performance seen in these states. Indeed, Perth home values remain 0.7 per cent below their December 2007 levels", Mr Kusher added.

Over the 12 months to February, Sydney (+3.3. per cent), Melbourne (+2.5 per cent), Canberra (+0.7 per cent) and Adelaide (+0.6 per cent) have ground out modest capital gains. In contrast, Brisbane (-5.3 per cent) and Perth (-4.1 per cent) have experienced more material corrections. ...

According to RP Data's Mr Kusher, the key leading indicators indicate that capital growth is likely to remain very subdued for the time being, as Rismark and RP Data have previously forecast.

"Auction clearance rates have been a little weak, the number of homes advertised for sale is at the highest level it has been since we started collecting this data, and other lead indicators, such as the time it takes to sell a home, and the margin by which vendors have to discount their properties, are climbing again after reaching a plateau in recent months. Conditions are certainly in the favour of prospective investors. The large stock of homes available for sale should afford potential buyers increasing scope to negotiate on price and get the best possible deal," Mr Kusher said.

See Full Press Release

RP Data - Rismark January Report

Here are some extracts from the latest RP Data Rismark report:

Disruptions caused by natural disasters and low sales volumes have resulted in soft market conditions across the Australian capital cities. Capital city values were down -1.6 per cent (s.a.) while the rest-of-state markets saw a -1.2% (s.a.) tapering in values.

Rismark's joint Managing Director Ben Skilbeck added, "There are growing signs of a soft recovery in the housing market after six months of flat dwelling values since May 2010. Housing credit growth looks to be rising a little, and the early auction clearance rate data in February has been a demonstrable improvement over the sub-50 per cent clearance rates at the end of last year. Our forecasting model implies low single digit capital gains in 2011 based on the assumption that the RBA tightens monetary policy further However it is noteworthy that the futures market is not pricing in the first full interest rate increase until February 2012. If the RBA stays on the sidelines in 2011 there will be material upside risks to our forecasts."

Over the twelve months to the end of January, Perth (-3.8 per cent), Brisbane (-3.7 per cent) and Canberra (-0.6 per cent) recorded a decline in home values.

Brisbane had a 5.2% decline in apartment prices over the past twelve months.

See RP Data Press Release and Domain article and Courier Mail

Values Steady, but Headwinds Loom: RP Data

"Dwelling values were up a modest 0.3% in seasonally-adjusted terms during October. Yet the November rate rise, bank top-ups, declining clearance rates, and a rising stock of unsold homes hint at tougher times ahead.

According to RP Data-Rismark’s market-leading Hedonic Home Value Index, Australian capital city dwelling values continued to consolidate in the month of October with a small seasonally-adjusted rise of 0.3% (+0.6% raw). In the first 10 months of the year, Australian capital city dwelling values have risen by a modest 4.3% (s.a.) (or +5.7% raw), which is broadly in line with disposable income growth. Capital gains in the twelve months to end October have been a solid 6.5% due to the double-digit annualised growth recorded in late 2009 and early 2010. Based on the RP Data-Rismark Index, the market peaked in May 2010 with capital city home values tapering since that time (-0.7% s.a., -0.6% raw). ... RP Data’s research director, Tim Lawless, commented, “Since the market started to cool in June the cumulative decline in dwelling values to the end of October has been less than one per cent across the capitals, suggesting a market that is slowing at a controlled pace. Of course, the October data doesn’t include any effect from the November interest rate rise, which we expect will have caused conditions to cool further.” ... Market conditions remain diverse across the key cities. Perth and Brisbane have been the weakest performers. These are the only capital city markets where home values have declined over the twelve months to October (-1.8% and -0.7%, respectively). Both cities have continued to lilt over the three months to end of October with home values down -3.8% s.a. in Perth and -1.6% s.a. in Brisbane. ...

While capital gains slow, RP Data-Rismark’s Indices show that rental markets have realised some gains across most capital cities. Over the 12 months to October gross weekly rents are up 3.7% or $15/week to $433/week for the combined house and unit market. According to Mr Lawless, “The increase in rental rates hasn’t been enough to impact greatly on yields just yet. Across the combined capitals gross rental yields are at 4.0% for houses and 4.8% for units, however there is typically a spike in rents around January and February as a large number of leases are renewed which is likely to see a more noticeable shift in yields.” ... Leading indicators in the market continue to foreshadow weak market conditions going forward. According to RP Data’s Tim Lawless, “capital city auction clearance rates are generally bobbing between 50% and 55% week to week suggesting that vendors still need to adjust their price expectations in order to make a sale. The average selling time for private treaty sales has increased to 48 days for houses from a low of 39 days late last year and sellers are now discounting their listed prices by about 5.7% on average to make a sale compared with 4.1% earlier this year.” Potentially the most concerning leading indicator is the build-up of properties available for sale. Compared with last year there are currently 23% more homes available for sale than there were 12 months ago. RP Data is tracking 126,860 unique properties available for sale within the capital cities, which is 23% higher than at the same time last year. Total listings are now just 1% lower than the previous peak which was recorded in the last week of October, 2008. According to Mr Lawless, “the escalation in stock levels is due to the combination of a higher than normal number of homes being added to the market at a time when market activity is slowing. The result has been a fairly rapid increase in the number of homes for sale. That’s great news for buyers who can take their pick and negotiate hard, but for sellers this is far from an ideal time to be listing your home.” Rismark’s Ben Skilbeck added, “Rismark’s national Dwelling Price-to-Disposable Household Income Ratio Index, which will be released later this week, was sitting at around 4.6 times in the second quarter of 2010. This was in line with where the ratio of homes price-to-incomes had been for the preceding seven years. The good news is that the current flat-lining in home values should result in a moderation in the national price-to-income ratio and present patient buyers with interesting opportunities in the year ahead.” Mr Lawless believes the outlook for residential property is likely to be fairly sedate over the coming 12 months. “If we use market conditions after the 2000 to 2003 property boom as a guide, month to month value changes saw a mixture of small upwards and downward movements over the following two years with total value growth just 4.7% between December 2003 and December 2005. Unemployment at that time was 5.9% and trending downwards and the resources sector was heating up. In the years ahead the RBA is forecasting very strong household income and employment growth. These two factors should help mitigate the impact of higher rate rises and prevent any material decline in prices.”

Source: RP Data

RP Data September Report

In August the seasonally-adjusted RP Data-Rismark Capital City Home Value Index fell by 0.2 per cent. On a non-seasonally adjusted basis the index remained unchanged in August. (Residential data are ‘seasonally-adjusted’ to remove the influence of the seasonal swings that occur at various times of the year.) Since the market peak in May 2010, the RP Data-Rismark Capital City Home Value Index has declined by 1.2 per cent (raw and seasonally-adjusted). Over the year to end August 2010, capital city home values have risen by 8 per cent. The median dwelling price in all capital cities is $457,000. ...

Mr Lawless added, “Rental yields across the capital cities are now showing signs of improvement. RP Data and Rismark estimate that the gross yield on units is 4.9 per cent while for detached houses it is a lower 4.0 per cent. On a total return basis, Australian housing has outperformed most other asset-classes over the last 10 years.”

Christopher Joye commented, “We were not forecasting any further capital growth in the second half of 2010. Recent data vindicate this thesis. In the first seven months of 2010, capital city dwelling values have accreted by 4.8 per cent in raw terms, which is in line with consensus expectations for disposable household income growth.”

“Futures market pricing for interest rates has changed dramatically over the last month, shifting from expectations of rate cuts to at least two hikes by end 2011. But following hawkish RBA remarks, economists are now predicting we’ll get 4-6 cash rate hikes. We’ve modified our views accordingly,” Mr Joye said.

He continued, “If the resources boom combined with frisky consumer spending compel the RBA to lift the cash rate 4-6 times by end 2011, we would expect to see nominal dwelling values decline modesty. This is not a bad thing. Asset prices cannot always rise - the volatile sharemarket regularly subjects investors to savage swings. Since 1993 there have been five instances when the RBA has lifted the cash rate sharply. On every single occasion national capital city dwelling prices have flat-lined or declined. If the RBA aggressively raises rates, there is no reason to expect 2010-11 to be any different.”

Source: RP Data

RP Data August 2010 Index

From the RP Data press release:

After a large 1.0% seasonally-adjusted fall in June, Australian home values changed little in the month of July, recording an increase of +0.1% (up +0.4% seasonally-adjusted).

According to the market-leading RP Data–Rismark Hedonic Home Value Index, Australia’s capital city home values remained relatively flat in the month of July recording a modest, seasonally-adjusted increase of 0.4% (on a raw basis home values were up only +0.1% in the month).

The July results follow a 1.0% seasonally-adjusted decline in the month of June; the first negative movement in Australian capital city home values in 17 months.

The slow-down in Australia’s housing market had been long-anticipated by RP Data and Rismark and was noted by the Reserve Bank of Australia in its most recent Board Minutes.

According to RP Data’s research director, Tim Lawless, the July index results are further evidence that Australia’s housing market has experienced a controlled soft-landing after a resounding recovery during the course of 2009.

“In the period between end 2008 and March 2010, Australian home values rose by 16.3%. Yet monthly growth rates have declined consistently since the start of the year. RP Data and Rismark expect to see the market track sideways over the second half of the year. There is the possibility of modest gains if mortgage rates remain in check and economic conditions continue to improve,” he said.

The deceleration in capital growth rates is evident across the cheaper, middle and more expensive suburbs tracked by the ‘stratified’ version of the RP Data-Rismark Hedonic Index. This index shows that while the most expensive 20% of suburbs realised the highest capital growth between end 2008 and March 2010, these same suburbs have suffered the largest falls in home values in the period since.
According to Mr Lawless, “As has been the case previously, the illiquid top-end of the market is showing higher volatility than lower priced markets. Home values in Australia’s most expensive suburbs fell more in 2008, rebounded quickly in 2009, and are now tapering at a more rapid rate than cheaper property markets. Home values in the most expensive 20% of suburbs were down 2.0% over the three months ending July 2010 compared with smaller declines of 0.4% and 0.7% in the cheapest 20% and middle 60% of the suburbs, respectively.”

Christopher Joye, Managing Director of Rismark International, said, “In contrast to claims that the decline in home values recorded in June would accelerate, we have seen quite the opposite: Australia’s housing market appears to have gravitated back to a no-to-very low growth trajectory, as we forecast.”

Mr Joye added, “RP Data’s leading indicator data also paints an encouraging picture. After falling from historically high 70-80% levels, national auction clearance rates have now leveled at around the 60% mark. While outstanding inventory levels have expanded in response to the weaker demand, they have recently settled. Perhaps most significantly, the futures market is currently pricing in no further interest rate hikes over the next 1-2 years. In recognition of the flat yield curve, we have seen some banks cutting the cost of fixed-rate loans.”

“Looking forward, I would expect to see the major banks pushing housing credit growth a little harder as profitability gains--driven by reduced impairment provisions across their business lending books--dissipate. Australian housing credit growth has been running at record low levels, and has experienced a downward trend since 2006. An increase in credit growth back to reasonable single-digit rates will provide further support to the market in the next 12 months.” Mr Joye said.

Mr Lawless agreed that substantial falls in Australian home values look very unlikely.

He said, “The number of homes being advertised for sale across Australia is only 5% higher than what we saw at the same time last year. We aren't seeing a blow out in stock levels and properties are taking on average about 40 days to sell, which is only a little higher than recent experience.

“And while we have noticed an increase in vendor discounting, this is coming off the very low base we recorded during 2009,” he said.

Australian House Prices Fall

"Aussie Dwelling Values Fall After 17 Consecutive Monthly Gains

30 July 2010 RP Data – Rismark Home Value Index Release Capital city dwelling values down 0.7% in month of June with no growth over June quarter Largest fall since April ’08 Rest of State dwellings also realise no growth in June quarter After 17 consecutive months of solid growth, dwelling values across Australia’s capital cities recorded their first monthly decline of 0.7% (seasonally-adjusted) in June according to the market-leading RP Data-Rismark Hedonic Home Value Index. This was the largest monthly fall in home values since April 2008. The June outcome follows on from a clear trend in the decline in monthly seasonally-adjusted growth rates in Australia’s capital cities over February (+1.0%), March (+0.9%), April (+0.6%) and May (+0.3%)." "Despite the recent moderation in capital gains, the risk of a dramatic decline in Australian dwelling values remains remote. According to Mr Lawless, “As the RBA has independently confirmed, arguments in favour of house price “bubbles” remain, in my opinion, overstated. Australia’s housing market has a structural shortage of roughly 200,000 homes, which has been substantiated by the National Housing Supply Council. While the inventory of unsold homes has risen of late, our Market Activity Index suggests that new listings activity will slow over the coming months. And although average time on market and vendor discounting have also expanded with the weaker conditions, these remain in line with historically reasonable levels.” “If we saw blow-outs in average time on market, re-listings, and vendor discounting, it would set off a few alarm bells. This, however, is not currently the case” Mr Lawless said." Brisbane apartment prices did ok. Brisbane Apartments - medium prices Month of June (indicative) - up 1.2% Quarter - up 1.9% Year to Date - up 5.7% Year on Year - up 5.9% Medium price over quarter - settled sales - $380,000 Brisbane Apartments - medium prices Month of May - up 0.9% Quarter - up 1.6% Year to Date - up 4.5% Year on Year - up 7.9%

RP Data April 2010 Index

In the month of April all cities recorded capital gains substantially less than the national average of one per cent per month in the previous 12 months, with Melbourne’s monthly growth rate halving from 1.6 per cent per month in the year to March to just 0.8 per cent in April.

Several cities recorded a dip in home values in April, with Brisbane values down 1.2 per cent, Perth values down 0.9 per cent and Darwin recording a 0.3 per cent fall. While both Brisbane and Perth have been consistently weak performers over the last year, Darwin dwellings have risen in value by 54 per cent since the start of 2007.

According to Tim Lawless, RP Data’s Director of Research, the April results are the lowest monthly capital gain since the end of the GFC-induced downturn in December 2008.

“A wide range of indicators have been hinting that a slowdown was on the cards. We are in a market now that has lower auction clearances, weaker home loan approvals, and lower consumer confidence. Combined with the six recent interest rate rises, and the fact that home values have recorded very large gains across key markets since the start of 2009, it is not surprising to see values start to track sideways,” Mr Lawless said.

Christopher Joye, CEO of Rismark International, added, “We have been forecasting a cooling in capital growth rates back down to single digit levels since October last year. Australian disposable household incomes rose by 11.5 per cent in 2009—unsurprisingly, the cost of housing increased by almost exactly the same amount. In 2010, disposable household income growth will be less than 5 per cent. Over the long-run, residential property values track purchasing power quite closely. We believe 2010 will be no different in this regard.”

Brisbane Apartments - medium prices

Month of April - down 1.2%

Quarter - down 0.4%

Year to Date - up 2.2%

Year on Year - up 6.8%

Medium price over quarter - settled sales - $375,000

Further Information Here and detailed information here

March 2010 Index Data

The RP Data – Rismark March Hedonic Home Value Index results released yesterday reveals that home values in Australia’s capital cities rose by 1.4 per cent in March (and +1.1 per cent on a “seasonally adjusted” basis) following on from similarly strong 1.7 per cent and 1.1 per cent growth rates across Australia in the months of January and February, respectively. In the 12 months to end March, Australian capital city home values have increased by 12.5 per cent.

Rpdata.com Director of Research, Tim Lawless, stated “We expect capital growth rates to cool in 2010 as the cost of mortgage finance is normalised by the RBA. Over the longer-term home values should be expected to track disposable incomes.”

Press Release

Brisbane values up 2.4% (median price: $439,000)

Brisbane apartments: Capital Growth to February 2010

Month: -0.9%

Quarter: 0.8%

Year to date: 1.9%

Year on year: 7.6%

Brisbane apartments: Capital Growth to March 2010

Month: 1.8%

Quarter: 3.7%

Year to date: 3.7%

Year on year: 9.1%

Medium over quarter = $375,000

Brisbane houses: Capital Growth to February 2010

Month: 0.4%

Quarter: 1.1%

Year to date: 2.0%

Year on year: 7.2%

Brisbane houses: Capital Growth to March 2010

Month: 0.2%

Quarter: 2.1%

Year to date: 2.1%

Year on year: 6.2%

Full details

Brisbane Up Only Slightly

Brisbane housing prices up 0.4% in February quarter.

See RP Data information and Joye's blog

Keen Walk

Keen got his prediction wrong, and is now about to walk. See keenwalk.com.au and blog

See also Chris Joye

RP Data - Rismark December 2009 report

Units outperform houses

2009 saw Australian unit values increase by 13.5 per cent compared with house values up 10.4 per cent. The trend was the consistent across every capital city, with units returning a strong gain over the year.

According to Mr Lawless, “The higher gains in the unit market are a deviation from normal performances. Historically houses have tended to outperform units. The recent reversal in fortunes has occurred due to more buyers leaning towards units because they have a more affordable price tag and are often located in more strategic locations in relation to transport and amenity than many detached housing options. Other factors may also include changing housing preferences, particularly amongst baby boomers, and more highly targeted unit developments being delivered to the market.”

Brisbane The Brisbane market remained comparatively subdued during 2009 with values increasing by 7.3 per cent over the year. The comparatively weak performance can partly be attributed to the strong gains recorded in 2007 where Brisbane values gained 24.6 per cent over the year. Gross rental yields in Brisbane remain above the national average with houses returning 4.4 per cent and units returning 5.0 per cent. 2010 is likely to see Brisbane outperform the national average due to the fact it is in a later stage of the cycle, together with ongoing strong population growth and the benefit of several major infrastructure projects coming to fruition. The median house price in Brisbane is now $463,000 and the median unit price $383,600

See RP Data Report

"December research undertaken by RP Data and Rismark International showed Brisbane property values rose by 7.3 per cent in 2009, well below the national average of 11.5 per cent.

This confirmed the findings of the Australian Property Monitors House Price Report, released earlier this week,which RP Data disputed at the time.

RP Data research director Tim Lawless said better performing capitals in 2009 included Darwin (16.6 per cent), Melbourne (15.6 per cent), Canberra (14.7 per cent), Hobart (12.4 per cent) and Sydney (11.4 per cent).

But Mr Lawless said he expected 2010 to be a very different story for the Sunshine State capital.

"In Brisbane, we have vacancy rates of around three per cent, very strong population growth and not a great deal of new housing being released. So that's the dynamic that's pushing prices upwards," he said.

Brisbane Times

Median Prices Can Be Misleading

From Chris Joye at Rismark:

“In the first quarter of 2009, some median index providers reported misleading results, claiming that house prices were falling when in fact they were rising rapidly. The medians were being dragged down by a surge in first time buyers purchasing cheap homes in the first three months of 2009. The RP Data-Rismark Hedonic Indices, in contrast, reported strong growth of circa 3 per cent in the first quarter in 2009.

“Since the first quarter, the RP Data-Rismark Hedonic Index has shown stable growth. In comparison, the median price indices are being artificially boosted by the fading of first time buyers and the return of upgraders buying more expensive homes, which drag the medians upwards. At the current time, the true rates of capital gains across Australia are likely to be substantially less than those reported by median price suppliers.”

From Chris Joye

Brisbane Apartment - medium price increases

The medium apartment price for Brisbane, as reported by RP Data - Rismark, is up 10% for the period January to November 2009. This is better than the increase in the medium price for Brisbane houses.

See RP Data Press Release

The medium price for Brisbane apartments is listed as $375,000, and the time on market for apartments in Brisbane is said to be 29 days.

Misleading Market Commentary

There is interesting market commentary from Chris Joye from Rismark, rebutting silly and factually incorrect statements published by the stock spruikers, Morning Money.

See Chris' blog entry, located here.

Auction Results and Monday Morning

On Monday morning, the newspapers often have an article about the health of the property market, based on the weekend's auction results report by APM. This is often misleading, for the following reasons:

• The APM results that are the basis for the report are often incomplete, as a number of auction results have not yet been reported.
• Brisbane has far fewer auction sales than Melbourne and Sydney - so the report does not take into account sales other than by auction which is the bulk of the sales in Brisbane
• The APM results focus on Saturday auctions, and do not capture auctions during the week. Ray White, for example, often has Friday morning auctions.
• The report, for the most part, relies on agents reporting to APM. If the agent has a bad result, there is less incentive to report.

Read Chris Joye here on this topic. This article makes a similar comment.

Housing Prices Rebound

"HOUSING prices around the country rose nearly 2 per cent in August, the biggest monthly increase since researcher RP Data-Rismark began its tracking in 2005.

The August increase takes housing value growth to 7.9 per cent for the first eight months of the year, with Melbourne turning in the best performance -- an 11.6 per cent jump. ...

In a note yesterday, Mr Walters said an expected 25 basis-point interest rate rise next week, tighter lending standards, the Commonwealth Bank's move this week to lift its fixed mortgage rate, and the winding down of the first-home owner grant would all affect new development.

David Devine, managing director of Queensland-based residential developer Devine, said it was nearly impossible to secure funding from the banks for apartment and unit projects, irrespective of pre-sales.

Mr Devine said figures from researcher BIS Shrapnel showed there was demand for 175,000 new homes nationally each year."

The Australian

"Unit values marginally outperformed house values in August, with units rising 2.1 per cent while houses gained 1.8 per cent." Source

Solid Gains in July 2009

Over the first seven months of the year Australian home values increased across every capital city, rising by 5.9 percent nationally.

Combined Brisbane house and apartment values up 3.8% to $437,175 for first 7 months of 2009

Brisbane Apartments were high performing, and outperformed Brisbane houses.

Brisbane Units - days on market = 26 days (almost the best in the nation)

Brisbane Units - 7 months to end of July increase - up 6.25%

Brisbane Units - 12 month Year on Year increase (at end of July) - up 6.58%

Brisbane Units - July 09 increase - up 3.26%

Based on Australia’s largest property database, owned by rpdata.com which includes roughly 145,000 sales for the first seven months of 2009, Australia’s housing recovery has continued in the month of July with solid across-the-board capital gains.

According to the market respected RP Data-Rismark Home Value Index, Australian home values rose by +0.9 percent in the month of July 2009. This brings total capital growth in the first seven months of 2009 to 5.9 percent.

Underpinned by historically low mortgage rates and only small rises in unemployment, Australian home values have now risen 1.8 percent past their February 2008 peak.

Rpdata.com national research director Tim Lawless, said, “Not only has Australia’s residential property market outperformed the other major western markets, it has also provided superior returns compared to shares, commercial property, superannuation, hedge funds and private equities. Australia’s residential market has been further supported by low mortgage default rates, at just 0.6 percent, compared with 5 percent in the US and 3 percent in the UK.”

“Every mainland capital city has experienced solid growth during the first seven months of the year. “ Mr Lawless said.

Property Blog

A good property Blog, written by Chris Joye from Rismark.