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RP Data Rismark Home Value Index 1 July 2013 FINAL (3)

RP Data Rismark Home Value Index 1 July 2013 FINAL (3)

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07/10/2013

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National Media Release

RP Data-Rismark June Hedonic Home Value Index Results
Released: Monday, July 1 2013
Further information contact: Mitch Koper, RP Data national communications manager – 07 3114 9879 or media@rpdata.com

Capital city dwelling values up by 3.0% over the first half of 2013 and 3.8% for the 2012/13 financial year.
The RP Data-Rismark combined capital city index has retraced the 1.7% decline recorded over April and May to finish the June quarter 0.2% higher.
Over the month of June, dwelling values rose by 1.9 Index results as at June 30, 2013 per cent across the RP Data-Rismark eight capital city Change in dwelling values Month Quarter YoY aggregate index. According to RP Data research Region 2.7% 1.2% 5.6% director Tim Lawless, the June rise has more than Sydney Melbourne 2.3% -0.4% 3.4% reversed the falls in the Index recorded over both April Brisbane 0.1% -1.4% 0.6% 0.7% 1.2% 0.2% and May when across both months, values dipped by Adelaide Perth 1.7% 0.1% 6.0% 1.7 per cent. Hobart -1.1% -2.1% -1.8% Annually, capital city home values rose by 3.8 per cent throughout the 2012/13 financial year which is a significant improvement from the -3.6 per cent fall in values over the 2011/12 financial year. According to Mr Lawless, the capital gains recorded over the financial year highlight that lower mortgage rates are starting to have a positive impact on the housing market, however current conditions are far removed from the buoyant conditions experienced in 2009. Capital city home values are up 3.8 per cent over the past twelve months and have now recovered 4.9 per cent of the 7.4 per cent correction. In comparison, the first twelve months of 2009 saw capital city dwelling values increase by almost 14 per cent. “At that time auction clearance rates were at a similar level to what they are now and mortgage rates were lower however, growth conditions were vastly different, Mr Lawless said. The quarter-on-quarter results for June showed capital city dwelling values were up 0.2 per cent, and were largely driven by a strong result in the largest capital city, Sydney. Melbourne and Brisbane recorded a slight fall in dwelling values over the quarter while the decline in Hobart, Darwin and Canberra was more significant. Each capital city housing market excluding Hobart, where values have fallen by -1.8 per cent, has recorded an increase in values over the past year. Annual capital gains have ranged from as little as 0.2 per cent in Adelaide to as much as 6.1 per cent in Darwin and 6.0 per cent in Perth.” Mr Lawless said that while there has been some natural volatility in the month-to-month readings of the RP Data-Rismark Index, the trend is much more indicative of an ongoing recovery in dwelling values.
Darwin Canberra 8 capital city aggregate Rest of state* 0.6% 0.3% 1.9% -0.3% -2.7% -1.6% 0.2% -0.9% 6.1% 1.1% 3.8% -0.4%

Total gross returns
10.3% 7.3% 5.5% 4.6% 10.9% 3.5% 12.7% 5.9% 8.4%

Median dwelling price
$580,000 $512,000 $425,000 $385,000 $500,000 $316,000 $481,000 $515,000 $491,000 $330,000

* Rest of state change in values are for houses only to end of May

Highlights over the quarter
Best performing capital city: Sydney and Adelaide +1.2 per cent Weakest performing capital city: Darwin, -2.7 per cent
Highest rental yields: Darwin houses with gross rental yield of 6.2 per cent and Darwin Units at 6.2 per cent Lowest rental yields: Melbourne houses with gross rental yield of 3.7 per cent and Melbourne units at 4.4 per cent Most expensive city: Sydney with a median dwelling price of $580,000 Most affordable city: Hobart with a median dwelling price of $316,000

Change in dwelling values over the 2012/13 financial year
7.0%
6.0% 5.0% 6.1% 6.0% 5.6% 3.8%

4.0%
3.0% 2.0% 1.0% 0.0% 3.4%

1.1%

0.6%

0.2%
-1.8%

-1.0%
-2.0% Darwin Perth Sydney Melbourne Canberra Brisbane Adelaide

Hobart

Australia 8 Capitals

Rolling annual change in capital city dwelling values
25.0% 20.0%

15.0% 10.0%
5.0% 0.0% -5.0% -10.0% Jun-97

Jun-99

Jun-01

Jun-03

Jun-05

Jun-07

Jun-09

Jun-11

Jun-13

Media enquiries contact: Mitch Koper , RP Data national communications manager – 07 3114 9879 or media@rpdata.com

www.rpdata.com/indices

National Media Release (Cont’d)
“Looking deeper into the index data reveals some interesting trends across the broad price based segments of the housing market.
“The Sydney premium housing market has gathered some pace since the beginning of the year, likely fuelled by stronger equity market conditions as well as the fact that premium priced housing markets showed a larger correction than other broad price segments. Sydney’s most expensive suburbs have seen dwelling values rise by 4.8 per cent over the past six months compared with a 3.2 per cent rise in values at the most affordable end of the market and a 4.6 per cent gain across the broad middle priced segment of the Sydney market.” “In the other major capitals, the most affordable and broad-middle priced segments of the housing market are typically showing the best value growth. Premium markets are generally showing some appreciation, but still not at the same rate as lower priced market segments,” Mr Lawless said. Ben Skilbeck, CEO of Rismark International, highlights that the daily index method provides timely insights into market dynamics not previously able to be observed using property indices. Unlike index methods which look at the mid price point of a basket of properties that happen to sell in one quarter and compare this to the mid price point of a very different basket of properties which happens to sell in another quarter, the RP Data-Rismark home value index tracks the change in the value of the same basket of properties through time. In fact, it tracks the value of the entire housing market on a daily basis. “While the underlying mechanics to achieve the daily index are complex, its accuracy is proven through its audited performance over time. In essence, on each day of calculation the index simply uses all the available data in the market place on that day, including sales and property attributes information, to determine the changes in value of each property comprising the market. Historic data such as sales information from last week or last month is clearly an important part of determining the current state of the market, however, to make it relevant to the current day, time variables and weightings need to be properly applied to the historic information.” “This index methodology highlights that housing markets do show intra-month and intra-quarter volatility as one would expect, although this volatility is very low compared to the share market. When looked at over a longer period, such as the last 3 months, recent index results highlight that capital gains remain relatively sluggish despite the presence of low interest rates and high auction clearance rates,” Mr Skilbeck continued. Mr Lawless points out that many other indices are also showing some movement which is reflective of the uncertainty that households are experiencing and the transition that is underway across Australia’s economy. “Consumer confidence also dipped over April and May before recording a rise in June, data on labour markets is jumpy and housing finance data shows hardly any improvement in the average loan size. If confidence levels remain high and labour markets continue to show a low rate of unemployment then we would expect that home values will continue to trend higher, albeit at a relatively measured pace.” Media enquiries contact: Mitch Koper , RP Data national communications manager – 07 3114 9879 or media@rpdata.com

Introduction to the RP Data-Rismark Daily Hedonic Home Value Index methodology:
The RP Data-Rismark Hedonic Home Value Index is calculated using a hedonic regression methodology that addresses the issue of compositional bias associated with median price and other measures. In simple terms, the index is calculated using recent sales data combined with information about the attributes of individual properties such as the number of bedrooms and bathrooms, land area and geographical 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 from changes 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 by observing the characteristics and sales prices of other dwellings which have recently transacted. It then follows that changes in the market value of the stock of residential property comprising an index can be accurately tracked through time. RP Data owns and maintains Australia's largest property related database in Australia which includes transaction data for every home sale within every state and territory. RP Data augments this data with recent sales advice from real estate industry professionals, listings information and attributes data collected from a variety of sources. For detailed methodological information please visit www.rpdata.com

Media enquiries contact: Mitch Koper , RP Data national communications manager – 07 3114 9879 or media@rpdata.com

www.rpdata.com/indices

Table 1: RP Data-Rismark Daily Home Value Index Results (Actual Results)
Brisbane Melbourne Gold Coast Australia 5 Capitals (ASX) Australia Brisbane 8 Capitals

Capital Growth to 30 June 2013 Table 1A: All Dwellings Month Quarter Year-to-Date Year-on-Year Total Return Year-on-Year
Median price* based on settled sales over quarter

Sydney

Adelaide

Perth

Hobart

Darwin

Canberra

2.7% 1.2% 4.6% 5.6% 10.3% $580,000

2.3% -0.4% 2.1% 3.4% 7.3% $512,000

0.5% -0.8% 0.7% 0.9% 5.8% $422,250

0.7% 1.2% 0.7% 0.2% 4.6% $385,000

1.7% 0.1% 4.4% 6.0% 10.9% $500,000

2.0% 0.3% 3.0% 3.9% 8.4% $490,000

-1.1% -2.1% 3.9% -1.8% 3.5% $316,000

0.6% -2.7% -0.4% 6.1% 12.7% $481,000

0.3% -1.6% 2.1% 1.1% 5.9% $515,000

0.1% -1.4% 0.4% 0.6% 5.5% $425,000

1.9% 0.2% 3.0% 3.8% 8.4% $491,000

Table 1B: Houses Month Quarter Year-to-Date Year-on-Year Total Return Year-on-Year
Median price* based on settled sales over quarter

2.7% 1.1% 4.8% 6.3% 11.0% $662,500

1.9% -0.5% 2.0% 3.3% 7.1% $561,000

0.5% -0.9% 0.6% 1.2% 6.1% $456,000

0.7% 1.6% 0.8% 0.2% 4.6% $400,000

1.8% 0.2% 4.7% 6.3% 11.2% $517,000

1.9% 0.2% 3.0% 4.1% 8.6% $520,000

-1.4% -1.6% 4.3% -2.0% 3.3% $335,000

0.5% -3.5% 0.8% 6.1% 12.6% $530,000

0.3% -1.7% 2.3% 1.1% 5.8% $565,000

0.3% -1.4% 0.5% 0.9% 5.7% $448,500

1.8% 0.1% 3.0% 4.0% 8.5% $520,000

Table 1C: Units Month Quarter Year-to-Date Year-on-Year Total Return Year-on-Year
Median price* based on settled sales over quarter

2.7% 1.6% 4.0% 2.4% 7.6% $500,000

4.8% 0.5% 2.9% 4.1% 8.9% $446,000

0.5% -0.1% 1.5% -1.6% 3.8% $360,000

0.1% -3.1% 0.3% -0.4% 4.5% $334,750

0.1% -1.0% 0.8% 2.4% 7.7% $420,000

2.7% 0.7% 3.1% 2.2% 7.3% $433,250

1.0% -6.4% -0.2% -0.1% 5.0% $265,000

1.4% 0.8% -5.4% 6.4% 13.1% $445,000

0.1% -0.9% -0.1% 1.7% 7.5% $415,000

-1.2% -2.2% -0.1% -1.8% 3.8% $370,000

2.5% 0.5% 2.8% 2.4% 7.5% $440,000

Table 1D: Rental Yield Results Houses Units

4.2% 4.9%

3.7% 4.4%

4.8% 5.4%

4.4% 4.9%

4.4% 5.1%

4.2% 4.9%

5.2% 5.2%

6.2% 6.2%

4.6% 5.6%

4.7% 5.7%

4.2% 4.9%

The indices in grey shading have been designed for trading environments in partnership with the Australian Securities Exchange (www.asx.com.au). Indices under blue shading (Hobart, Darwin, Canberra, Brisbane and the 8 capital city aggregate) are calculated under the same methodology however are not currently planned to be part of the trading environment.

*The median price is the middle price of all settled sales over the three months to the end of the final month. Median prices are provided as an indicator of what price a typical home sold for over the most recent quarter. The median price has no direct relationship with the RP Data-Rismark Hedonic Index value. The change in the Index value over time reflects the underlying capital growth rates generated by residential property in the relevant region.
The RP Data-Rismark Hedonic Index growth rates are not ordinarily influenced by capital expenditure on homes, compositional changes in the types of properties being transacted, or variations in the type and quality of new homes manufactured over time. The RP Data-Rismark ‘index values’ are not, therefore, the same as the ‘median price’ sold during a given period. See the methodology below for further details. Methodology: The RP Data-Rismark Hedonic Home Value Index is calculated using a hedonic regression methodology that addresses the issue of compositional bias associated with median price and other measures. In simple terms, the index is calculated using recent sales data combined with information about the attributes of individual properties such as the number of bedrooms and bathrooms, land area and geographical 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 from changes 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 by observing the characteristics and sales prices of other dwellings which have recently transacted. It then follows that changes in the market value of the stock of residential property comprising an index can be accurately tracked through time. RP Data owns and maintains Australia's largest property related database in Australia which includes transaction data for every home sale within every state and territory. RP Data augments this data with recent sales advice from real estate industry professionals, listings information and attribute data collected from a variety of sources. For detailed methodological information please visit www.rpdata.com

For more information on the RP Data-Rismark Indices, please go to http://www.rpdata.com Media enquiries contact: Mitch Koper , RP Data national communications manager – 07 3114 9879 or media@rpdata.com

Media enquiries contact: Mitch Koper , RP Data national communications manager – 07 3114 9879 or media@rpdata.com

www.rpdata.com/indices

About RP Data
RP Data is 100 per cent owned by CoreLogic which is a leading provider of consumer, financial and property information, analytics and services to business and government. The company combines public, contributory and proprietary data to develop predictive decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. Today, CoreLogic has more than 6,000 employees globally with 2012 revenues of $1.6 billion and is listed on the NYSE. At RP Data, we continually collect, manage and process property-based data and imagery from over 300 sources across Australia including government agencies, media partners and industry professionals. RP Data is the biggest provider of property information, analytics and risk management services in Australia and New Zealand with a database of 210 million property records. RP Data serves customers ranging from real estate agents and consumers to banks, mortgage brokers, financial planners and governments. We understand that data is most useful when it’s presented as relevant and actionable analytics. Our data provides customers with insights that realise more market opportunities, while simultaneously growing businesses and managing risk. Our results speak for themselves; we’re helping over 100,000 end users including approximately 45,000 real estate agents win more business by providing Australia’s most trusted prelistings comparative market appraisal (CMA) report, as well as industry standard tools that promote transparency and confidence when buying and selling property. In addition, 1 million consumers use RP Data to make important decisions about property they are about to hold, sell or purchase. Our Mortgage Platforms cover more than 90 per cent of the mortgage lending activity in Australia. We estimate the value of every residential property in Australia each week via our automated valuation models which support our industry leading RP Data Rismark Daily Home Value Index. On average, we issue over 30 million automated valuation assessments every month. We’re Australia’s leading source for mobile property information too – with over 500,000 mobile devices accessing our services each month. Using public and proprietary data, we bring insight and transparency to the Australian property market. We employ 330 people at ten locations in Australia and New Zealand and our revenue for 2012 was over $70 million.

About Rismark International
Rismark International ("Rismark") is a funds management and quantitative research business. It is dedicated to the development of intellectual property required to facilitate the creation of financial markets over the residential real estate asset class. Rismark also has a long history of advising Australian and overseas governments on the development of innovative economic policies as they relate to housing and financial markets. As a by-product of its quantitative research activities, Rismark has developed the technology and intellectual property underlying the market-leading RP Data-Rismark hedonic property price indices and related automated property valuation models (AVMs), amongst other things. For more information visit www.rismark.com.au.

Media enquiries contact: Mitch Koper , RP Data national communications manager – 07 3114 9879 or media@rpdata.com

www.rpdata.com/indices

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