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Rpdata Rismark Home Value Index 1june 2012

Rpdata Rismark Home Value Index 1june 2012

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06/01/2012

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RP
 
Data
Rismark
 
May
 
Hedonic
 
Daily
 
Home
 
Value
 
Index
 
Results
National 
 
Media
 
Release
Housing market remains soft despite rate cuts
Residential property values have continued to slideacross the capital cities, with the RP Data-RismarkHome Value Index recording a -1.4 per cent fall indwelling values over the month of May. The latestdrop brings the cumulative decline to -2.2 per centover the first five months of 2012 and overall valuesare down -5.3 per cent over the past twelve months.The May value falls were spread across every capitalcity apart from Adelaide where dwelling valuesbucked the trend, improving by 1.2 per cent.Melbourne recorded the weakest market conditionsover the month with dwelling values down -2.7 percent in May.Much of the weakness is confined to the detachedhousing market rather than apartments. According toRP Data’s research director Tim Lawless, unit valueshave been much more resilient to value fallscompared to houses.“It is clear that the market is becoming increasinglyprice point driven. Unit values across the combinedcapitals increased in May and they are up by 1.3 percent over the first five months of the year. Basedon median prices, unit prices are generally around 15to 20 per cent lower than house prices. Investmentyields also tend to be higher and units are oftenlocated more strategically compared with theirdetached counterparts,” Mr Lawless said.The stronger performance across more affordablemarkets is also evident in the results from the RPData-Rismark Stratified Hedonic Home Value Index.This index provides a summary of how dwellingvalues have changed across the most expensive 20per cent of capital city suburbs, the middle 60 percent of suburbs and the most affordable 20 per centof suburbs.According to Mr Lawless, “Premium dwelling valueshave fallen by -6.1 per cent over the twelve monthsending April 2012 while dwelling values at theaffordable end of the spectrum are down by just -1.5per cent.”
Year
 
on
 
year
 
change
 
in
 
dwelling
 
values
www.rpdata.com/indices
TheRPData-RismarkMayHomeValueIndexresultsconfirmedafurtherdropof-1.4percentforcapitalcityhomevaluesindicatingthatthehousingmarkethasnotrespondedtothelatestroundofinterestratecuts.
Released:
 
Friday,
 
 June
 
1,
 
2012
 
(Embargo:
 
10:30am
 
EST)
 
Further 
 
information
 
contact:
 
rpdata.com
 
– Mitch
 
Koper 
 
– 0417 
 
771
 
778
 
or 
 
 for 
 
Rismark 
 
Ben
 
Skilbeck 
 
– 0403
 
138
 
172
Highlights over the quarter
Best performing capital city: Adelaide
+1.0 per cent over the threemonths to 31 May 2012
Weakest performing capital city
:
Melbourne,
-4.6 per cent over thethree months to 31 May 2012
Highest rental yields
:
Darwin houses
with gross rental yield of 6.0 percent and
Darwin Units
at 5.9 per cent
Lowest rental yields:
Melbourne houses
with gross rental yields of 3.7per cent and
Melbourne & Adelaide units
at 4.5 per cent
Source:
 
RP
 
Data–Rismark 
 
*
 
Rest 
 
of 
 
state
 
data
 
based 
 
on
 
results
 
 for 
 
houses
 
to
 
end 
 
of 
 
 April Source:
 
RP
 
Data–Rismark *
 
Rest 
 
of 
 
state
 
change
 
in
 
values
 
are
 
 for 
 
houses
 
only 
 
to
 
end 
 
of 
 
 April 
Rolling
 
annual
 
and
 
quarterly
 
change,
 
Combined
 
8
 
capital
 
citiesIndex
 
results
 
as
 
at
 
May
 
31,
 
2012
Media
 
enquiries:
 
RP
 
Data:
 
Mitch
 
Koper
 
 – 0417
 
771
 
778
 
Rismark
 
International: Ben
 
Skilbeck
 
 – 0403
 
138
 
172
RegionMonthQuarterYoY
Sydney -1.2% -1.2% -3.6% 0.7% $555,000Melbourne -2.7% -4.6% -8.4% -5.1% $490,000Brisbane -0.3% -0.8% -6.0% -1.5% $415,000Adelaide 1.2% 1.0% -2.4% 1.8% $370,000Perth -1.7% -0.7% -3.9% 0.2% $460,000Hobart -1.2% -2.7% -8.9% -4.0% $350,000Darwin -2.4% 0.2% -1.2% 4.6% $472,500Canberra -1.5% -1.7% -0.9% 4.0% $495,0008 Capital city aggregate -1.4% -2.0% -5.3% -1.2% $470,000Rest of state* -0.2% -0.6% -1.4% na $320,000
Change in dwelling valuesTotal grossreturnsMedian dwellingprice
 
8.9%
8.4%
6.0%
3.9%
3.6%
2.4%
1.2%
0.9%
5.3%
1.4%
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%0.0%Hobart Melbourne Brisbane Perth Sydney Adelaide Darwin CanberraCombined
 
8capitalsRest
 
of state*
10.0%
5.0%0.0%5.0%10.0%15.0%20.0%25.0%May
 
96 May
 
98 May
 
00 May
 
02 May
 
04 May
 
06 May
 
08 May
 
10 May
 
12
 
National 
 
Media
 
Release
 
cont’d 
According to Rismark managing director Ben Skilbeck, one positive to take away from the soft housing market isthat housing affordability is showing a marked improvement.“The combination of interest rate reductions, declining home values and disposable income growth hassignificantly improved affordability. Since dwelling values peaked in November 2010, they are down by -7.6 percent, the RBA cash rate has fallen from 4.75% to 3.75% and disposable income per household has increased byover 5 per cent,” Mr Skilbeck said.Rental yields are also showing some improvement, not just on the back of lower home values but also higherrents. Tim Lawless points out that rental yields are continuing to shift higher.“Rental yields are higher now compared to a year ago across every capital city. In some cities where rents haveincreased meaningfully such as Darwin and Perth, gross rental yields have improved by 50 basis points ormore.”According to Mr Lawless, other housing market indicators are showing some positive signs that conditions mightmove towards stability.“Each of the key vendor metrics we analyse have improved over the month. Vendor discounting has reducedfrom a peak of -7.9 per cent to -7.1 per cent which suggests that vendors are becoming more realistic aboutprice expectations on their home. The average number of days it takes to sell a property has also fallen from theseasonal highs recorded earlier this year. The typical capital city house is now taking 63 days to sell comparedwith 70 days last month. Auction clearance rates have also levelled around the 50 per cent market comparedwith an average of about 45 per cent throughout the second half of 2011,” Mr Lawless said.Mr Skilbeck said that weak consumer sentiment appears to remain a barrier to the recovery in dwelling values.“Despite what appears to be a positive economic picture here in Australia, with unemployment below 5 per cent,solid population growth and below average mortgage rates, the Westpac Melbourne Institute Index of ConsumerSentiment remains 6.3% below its long term average. Concurrently, new mortgage finance commitments aren’tmoving a great deal suggesting we are yet to see heightened buyer activity return to the market,” Mr Skilbecksaid.Another hurdle for the property market is the large number of properties currently being advertised for sale.Based on RP Data estimates, there were approximately 308,500 homes advertised for sale across Australiaduring May which is almost 9 per cent more than at this time last year.While stock levels have reduced since the latter part of 2011, Mr Lawless said that this result still represents alarger than normal pool of homes available for sale at a time when transaction volumes are running well belowtheir five year average.
Media enquiries contact:
RP Data: Mitch Koper, corporate communications manager on 0417 771 778 ormitch.koper@rpdata.comRismark: Ben Skilbeck, Managing Director, on 0403 138 172bs@rismark.com.au
IntroductiontotheRPData-RismarkDailyHedonicHomeValueIndexmethodology:
The RP Data-Rismark Hedonic Home Value Index is calculated using a hedonic regression methodology that addresses the issue ofcompositional bias associated with median price and other measures. In simple terms, the index is calculated using recent sales datacombined with information about the attributes of individual properties such as the number of bedrooms and bathrooms, land area andgeographical context of the dwelling. By separating each property comprising the index into its various formational and locational attributes,differing observed sales values for each property can be separated into those associated with varying attributes and those resulting fromchanges in the underlying residential property market. Also, by understanding the value associated with each attribute of a given property,this methodology can be used to estimate the value of dwellings with known characteristics for which there is no recent sales price byobserving the characteristics and sales prices of other dwellings which have recently transacted. It then follows that changes in the marketvalue of the stock of residential property comprising an index can be accurately tracked through time. RP Data owns and maintainsAustralia's largest property related database in Australia which includes transaction data for every home sale within every state andterritory. RP Data augments this data with recent sales advice from real estate industry professionals, listings information and attribute datacollected from a variety of sources. For detailed methodological information please visitwww.rpdata.com
www.rpdata.com/indices
Media
 
enquiries:
 
RP
 
Data:
 
Mitch
 
Koper
 
 – 0417
 
771
 
778
 
Rismark
 
International: Ben
 
Skilbeck
 
 – 0403
 
138
 
172

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