Showing posts with label rp data. Show all posts
Showing posts with label rp data. Show all posts

Saturday, March 3, 2018

No Price Growth for Brisbane Apartments

RP Data CoreLogic have issued their Home Value Index Report for March 2018.

The medium price for apartments has dropped from $400,000 in April 2017 and $389,000 in August 2014 to $383,000.   This price decline does not take into account stamp duty or agents fees.  For example, a person buying an apartment for $400,000 a year ago, really paid $412,000 including stamp duty, and selling it for $380,000 today is only receiving about $368,000 after agents fees.  So the loss is actually $44,000 or about 10% loss.  It appears that the loss is going to increase over the next few years.

I suspect that anyone who purchased an apartment after 2010 would be selling at a significant loss if having to sell today.

CoreLogic head of research, Tim Lawless, said, “The overall softening in the market becomes more evident when looking at the change in values over the past three months.” 


Brisbane apartment prices (to 28 February 2018)
February 2018 - no change
Quarter - down 0.3%
Year to Date - up 0.1%
Year on Year - down 0.6% 
Median value - $383,000

Monday, February 26, 2018

No surprise - Brisbane apartments cheaper than Sydney

Sydney apartments are way more expensive than apartments in Brisbane.


Sydney’s median apartment value currently sits 98.3% higher than Brisbane’s median apartment value, which is the largest premium since late 2002.  The average premium for a Sydney apartment over Brisbane has been recorded at 54.1%.

Does this mean that Brisbane apartment values will rise as a result of this difference?  CoreLogic does not think so:

"We would expect the Sydney premium to reduce over the coming years as values decline however, we also believe that historical premiums for Sydney relative to other capital cities don’t reflect the likely differentials in the cost of housing going forward.  That is to say we expect that the cost of housing in Sydney and Melbourne will continue to be higher relative to other capital cities than it has been in the past."

See CoreLogic Report

Monday, May 1, 2017

Brisbane Apartment Prices in Freefall

The latest CoreLogic report, issued today, shows that the prices of Brisbane apartments are falling, dramatically.
See https://issuu.com/corelogicaustralia/docs/2017-05-01--corelogichomevalueindex

Brisbane apartment prices (to 30 April 2017)
April 2017 - down 3.1%
Quarter - down 1.9%
Year to Date - down 2.1%
Year on Year - down 3.1% 
Median price based on settled sales of Brisbane apartments over the quarter - $400,000

A 3% decline on a $500,000 apartment is a loss of $15,000.

Rents are also dropping, on my rough calculation by about 5%.

Thursday, February 2, 2017

Brisbane Still Going Backwards

According to RP Data CoreLogic, Brisbane apartments did badly in 2016.  See report here.
Brisbane apartment prices (to 31 January 2017):
January 2017 - down 0.1%
Quarter - up 0.2%
Year on Year - down 2.7% 
Median price based on settled sales of Brisbane apartments over the quarter - $380,000

The report says:
Mr Lawless cites the large number of high-rise units currently under construction as another factor that may slow overall housing market performance. He said, “Dwelling approvals have already peaked across the high rise sector, as have construction commencements. However, the unit supply pipeline remains at unprecedented levels with a large proportion of these high rise units located within the inner city regions.”
“As these units flow through to settlement, the risk of buyers receiving a finance shock is becoming heightened.”
”Metadata flowing across CoreLogic valuation platforms is showing more than 40% of off-the-plan settlement valuations are coming in under contract price across the Melbourne, Brisbane and Perth unit sectors. While the large majority of these ‘under valuations’ are not showing a significant gap between the contract price and settlement valuation, more significant differences can be seen in some projects and precincts. Buyers who receive a valuation lower than the original contract price will generally require a larger than expected deposit in order to meet the loan to valuation ratio required by the lender.” 

Monday, June 6, 2016

Brisbane Apartment Prices Up Slightly: RP Data CoreLogic report for May 2016

Brisbane apartment prices (to 31 May 2016):
May 2016 - up 1.3%
Quarter - up 0.8%
Year to Date - up 2.3%
Year on Year - up 2.4%  (Sydney is up 15%, Melbourne up 8%)
Median price based on settled sales of Brisbane apartments over the quarter - $385,000

Friday, March 11, 2016

Will Brisbane Prices Increase This Year?

CoreLogic recently reported:

"The trend in home value growth is showing signs of increasing in those markets that have previously underperformed. These include Brisbane, Adelaide, Hobart and Canberra. Affordability constraints as apparent in these cities and rental yields been compressed to the same extent as what they have in Melbourne or Sydney. Home values increased in Brisbane by 5.5% over the past year, which is the fastest annual rate of value growth in a year."

The above 5.5% included houses and apartments.  Below is the information just for apartments, which is not as good.  The question is whether Brisbane will have capital appreciation across the board, or whether it will be limited to certain suburbs, or to houses (not apartments), or to houses and older apartments in better locations.  There appears to be great oversupply of new smaller apartments, in locations such as Newstead and South Brisbane, so capital appreciation of this dwelling type seems doubtful.

Brisbane apartment prices (to 29 February 2016):
February 2016 - down 1%
Quarter - up 0.9%
Year to Date - up 1.5%
Year on Year - up 3%
Median price based on settled sales of Brisbane apartments over the quarter - $391,000 (which is less than reported for the quarter ending May 2015).

Wednesday, March 9, 2016

Property Prices Double Every 10 years?

I have been to seminars by property agents and promotors, where they say that property is a sure investment because property prices double every 7 to 10 years.  CoreLogic debunks that "rule".

"Melbourne is the only capital city housing market in which home values have doubled over the past decade.  In fact, many cities are a long way from having doubled with values in Brisbane, Adelaide, Perth, Hobart and Canberra having all increased by less than 50% over the past decade."

See CoreLogic Report

Monday, January 4, 2016

Brisbane apartment market looking grim

According to the CoreLogic RP Data Home Value Index, dwelling values were absolutely flat across the combined capitals during December, with negative movements in Sydney, Adelaide and Canberra being offset by a rise in dwelling values across the remaining five capital cities. The Sydney housing market was the main drag on the December results, with dwelling values down 1.2%, while values were down 1.5% in Adelaide and 1.1% in Canberra, and down 0.5% for Brisbane apartments.

See full report here.

Brisbane apartment prices (to 31 December 2015):
December 2015 - down 0.5%
Quarter - no change
Year on Year - up 1.8%
Median price based on settled sales of Brisbane apartments over the quarter - $390,000

This is not a good result for the Brisbane apartment market for 2015.

The long term view for the Brisbane apartment market looks very uncertain.

There are a huge number of apartments being constructed.  There are also a number of new hotels opening, which impacts the short term rental markets (for example,  negatively impacting rents in apartment buildings such as Charlotte Towers, Aurora, Felix, Casino Towers and Festival Towers).  At present, from my informal survey, rents are decreasing in Brisbane and vacancy periods are significantly increasing.  This will only get worse.  I am not the only one say this.  See AFR article.

It is likely that valuations for new apartments sold off the plan in Brisbane will come in lower than the contract price, which may impact whether non-cash buyers will be able to settle.

My prediction for 2016 is that we may see values fall in 2nd tier buildings and remain flat in prestige buildings.  Rents will likely continue to decrease.  It looks grim.  What happened to the Gold Coast about 5 years ago (remember, Soul, Hilton and Oracle) may happen in Brisbane this year or next.

Friday, August 7, 2015

Brisbane Apartments and Units perform poorly

CoreLogic (RP Data) has released its recent monthly housing report.

"According to Mr Lawless, the strongest growth conditions outside of Sydney and Melbourne have been in Brisbane where dwelling values were 3.9 per cent higher over the year. Sydney and Melbourne values continue to boom, the next best performing city, Brisbane, has seen dwelling values rise by just 3.9 per cent over the past twelve months. Based on the median dwelling price, Sydney prices are now 72 per cent higher than Brisbane’s and Melbourne’s are 24 per cent higher,” he said."

However, apartments in Brisbane performed very poorly when compared with houses.  In fact, apartment values have declined in Brisbane.

Brisbane apartment prices (to 31 July 2015):
July 2015 - down 1.9%
Quarter - down 2.3%
Year to Date - down 0.8%
Year on Year - down 2.5%
Median price based on settled sales of Brisbane apartments over the quarter - $380,000


Monday, June 1, 2015

Capital city dwelling values rise 9% over past 12 months but capital losses in May

From RP Data:

Today's results revealed the pace of home value growth stalled in May with dwelling values down 0.9% over the month.  After an increase in dwelling values of 3.8 per cent over the first four months of the year, the May CoreLogic RP Data Home Value Index results out today recorded a drop of 0.9 per cent for the month across the combined capitals index; the first month-on-month fall since November last year.

Mr Lawless said, "Over the past three years, dwelling values have risen more than three times as fast as rents. Dwelling values are 24.2 per cent higher across the combined capitals over the past three years while weekly rents have risen by only 7.2 per cent. The net result is that gross rental yields have been compressed from 4.3 per cent back in 2012 to the current average gross yield of 3.7 per cent across the combined capital city index," he said.


Brisbane apartment prices (to 31 May 2015):
May 2015 - up 0.1%
Quarter - up 1.4%
Year to Date - up 1.7%
Year on Year - up 2%
Median price based on settled sales of Brisbane apartments over the quarter - $393,500


Saturday, April 4, 2015

Property is a very long term investment

"Across resales of homes throughout the December 2014 quarter, those homes that were held for only a short period of time proved to be much more susceptible to loss. Although home values increased over the 2014 calendar year, 13.1% of owners who purchased and resold in the same year recorded a gross loss (resales in less than a year accounted for just 1.6% of all resales over the year). Homes resold after being held for between 3 and 5 years were the most likely to record a gross loss (17.1%) followed by those held between 5 and 7 years (15.3%). The data also reiterates the long-term nature of housing investment as well as relatively weaker growth in values over the past decade. Of those homes resold between 10 and 15 years from the previous purchase only 48.4% sold for double their original purchase price with the proportion rising to 95.0% for homes sold after 15 years of ownership."

Source: RP Data Pain Gain Report


 More than 10% of resellers in Brisbane suffered capital losses:


Friday, March 6, 2015

Rental Yields Decreasing as Prices Increase

From RP Data CoreLogic:

"CoreLogic RP Data February Home Value Index results released today showed that Australia’s combined capital cities have seen dwelling values rise by a further 0.3 per cent in February taking home values 8.3 per cent higher over the past twelve months.
According to CoreLogic RP Data head of research Tim Lawless, dwelling values continued their upwards trajectory over the month of February by recording a 0.3 per cent gain over the month. This now takes combined capital city dwelling values 2.5 per cent higher over the rolling quarter and 8.3 per cent higher over the twelve months to the end of February.
Over the past twelve months the CoreLogic RP Data Index shows dwelling values across the eight capital city aggregate index are up 8.3 per cent. Sydney is once again the clear standout with dwelling values 13.7 per cent higher while Melbourne values are 7.4 per cent higher. Australia’s third largest city, Brisbane, recorded the third highest rate of annual capital gain with dwelling values up 5.9 per cent. In contrast, dwelling values have increased by less than four per cent in every other capital city over the year.
Evidence of compressed rental yields is continuing across each of the capital city markets. A year ago the gross rental yield for a capital city dwelling was averaging 4.3 per cent; by the end of February the typical gross yield has been eroded down to just 3.7 per cent - due largely to the consistent high rate of dwelling value growth relative to rental growth."

Brisbane apartment prices (to 28 February 2015):
February 2015 - up 0.5%
Quarter - down 2.3%
Year to Date - up 0.3%
Year on Year - up 0.5%
Median price based on settled sales of Brisbane apartments over the quarter - $385,000

So, Brisbane apartment prices over the past year have barely increased, and increased much less than detached houses in Brisbane.  Brisbane is still under performing compared with Sydney and Melbourne.  And if you purchased at the peak of the market in about 2008, you would still be well underwater.


Monday, November 3, 2014

October is a better month for Brisbane apartment median values

The RP Data CoreLogic Home Value Index registered a 1.0% capital gain across the combined capital cities over the month of October, however the annual rate of growth has continued to trend lower.
According to the RP Data CoreLogic Home Value Index, dwelling values across Australia’s capital cities increased by 1.0 per cent over the month of October. The data highlights that despite a slowdown in growth in September, values continued to rise, increasing by 2.2 per cent over the past three months. Although combined capital city home values were up by 1.0 per cent over the month, only Sydney (1.3%), Melbourne (1.9%) and Brisbane (0.6%) actually recorded value rises over the month.
Dwelling values rose by 2.2 per cent over the three months to October 2014 however, only half of the capital cities actually recorded an increase in values. According to Mr Lawless this result highlights weaker housing market conditions outside of Australia’s largest cities.
According to Mr Lawless, Sydney, Melbourne, Brisbane and Adelaide (which happen to be four of the five largest capital cities), were the only capital cities to record an increase in home values over the past three months. [Note - this does not apply to Brisbane apartments, which recorded a decline for this three month period.]  Sydney continues as a standout with home values increasing at a rate of more than 1 per cent a month, up 3.9 per cent over the past three months. He said that Perth and Canberra have clearly moved through the peak of their growth cycles.
Brisbane apartment prices (to 31 October 2014):
October 2014 - up 1.6%
Quarter - down 0.4%
Year to Date - up 2.6%
Year on Year - up 4.5%
Median price based on settled sales of Brisbane apartments over the quarter - $380,000

Saturday, November 1, 2014

No capital growth for Brisbane property over last six years

Most recent property investors in Brisbane are likely to have lost money.

From a recent report from RP Data:

"The next time you hear someone talk of the booming national housing market remember these statistics.  Yes combined capital city home values are rising and this is due to the influence of the Sydney and Melbourne housing markets where values are rising.  Real home values in Brisbane, Adelaide, Perth and Hobart are still lower than they were before the financial crisis and have seen no real growth in more than six years."



Sunday, October 19, 2014

Brisbane Still Behind


Chart from RP Data.  Brisbane market has under performed the combined capitals average since 2008.

Friday, October 17, 2014

Rental Report

RP Data has recently released its quarterly rental review.  It shows that Brisbane apartment rents are flat.  My sources tell me that rents are declining.
  • Vacancy rates are longer.  My rough rule of thumb is that for every week a property is vacant, that is approximately $10 a week off the rent for a one year period.
  • Rental periods (e.g. 1 year, 6 months) are tending to be shorter, with tenants turning over more often
  • Actual rents are flat, or decreasing slightly.
  • New apartment buildings that have many empty apartments are offering rent free periods, which in effect is a rent reduction.  For example, if the weekly rent is $500 a week, but the landlord offers four weeks for free, then the effective rent for the year is $461 a week.  But the RP Data report will show the rent as $500 a week.

Tuesday, October 14, 2014

Pain Report - Capital Losses

From RP Data:

The RP Data Pain & Gain report is a quarterly assessment of realised gross profit and loss based on dwelling re-sales over the June quarter of 2014.

  • 9% recorded a gross loss from the original purchase price.
  • Gross value of the losses associated with these loss making re-sales totalled $398.3 million
  • 91% of all June 2014 quarter re-sales recorded a gross profit relative to their original purchase price. The gross profit from these re-sales equated to $14.4 billion.
  • 9% of all homes that resold over the second quarter of 2014 recorded a gross loss compared with original purchase price - down from 9.7% at the end of the first quarter of 2014 and much lower than the 11.5% recorded over the June 2013 quarter.
  • The gross value of losses on homes re-sold over the quarter was recorded at $398.3 million
  • The average gross loss per loss making transaction was $63,097.
  • 91% of all re-sales over the June quarter of 2013 transacted at a gross profit, with 30.5% of all re-sales at least doubling their money compared with their original purchase price.
  • Gross profit on resales was $14.4 billion
  • Average gross profit per profit making transaction was $225,830.
  • Download the Pain & Gain report.

Saturday, September 6, 2014

Brisbane still under performs


RP Data reports that the Brisbane property market has under performed the combined capitals average since 2008 but is gathering some momentum.

Economic Data remains mixed - RP Data

RP Data reports the following:

Mortgage demand has started to level recently
  • The RP Data Mortgage Index (RMI) shows that mortgage demand has begun to level over the past couple of months.
  • ABS housing finance data shows a similar trend with the market largely driven by upgraders and investors.
Economic data flows remains mixed
  • Population growth is winding down but remains high on an historic basis.
  • Dwelling approvals have shifted much higher over the past year and are at their highest ever level on an annual basis.
  • With population growth slowing and building approvals remaining high (despite the recent fall) we may see a better relationship between approvals and population growth over the coming years.
  • Consumer sentiment has been weak since the Federal Budget but is slowly increasing.
  • The unemployment rate has hit 6.4% with employment growth quite slow.
  • Mortgage rates remain low with banks competing hard for their share of the home loan business.

Monday, September 1, 2014

Brisbane Apartment Prices Down Slightly in August

From RP Data's months report for August 2014:

According to today’s results, with rental rates rising at a slower pace than dwelling values RP Data expects to see a compression in rental yields across each of the capital cities. The only regions where yields have moved higher over the past 12 months have been across the Adelaide and Hobart apartment markets.

Across the combined capital cities, the typical gross yield on a house has reduced from 4.1 per cent to 3.7 per cent over the past twelve months. Mr Lawless said the most significant yield compression is taking place in Sydney and Melbourne.

Investors are currently comprising their largest proportion of new mortgage commitments since late 2003. In fact, investor loan commitments have accounted for more than 38 per cent of all mortgage lending for nine consecutive months, the longest period ever that investment lending has held above that level.

“Investors are mostly concentrated across the Sydney and Melbourne apartment markets where capital gains have been strong but yields have been pushed very low. Potentially there are better investment returns to be had in the smaller capital cities where the growth trend is less mature and yields are also healthier.” Mr Lawless said.


Brisbane apartment prices (to 31 August 2014):
August 2014 - down 0.5%
Quarter - up 1.6%
Year to Date - up 2.6%
Year on Year - up 5.6%
Median price based on settled sales of Brisbane apartments over the quarter - $389,250