Menu

Property market flat as a pancake over June 2012 quarter

August 2, 2012

Yesterday, the Australian Bureau of Statistics released its Eight Capital Cities House Price Indexes for the June 2012 quarter. It was the last of the four main data providers to publish – the others being RP Data-Rismark, Australian Property Monitors and Residex.

As usual, there is a fair amount of divergence between the four data providers about the state of the market. This shouldn’t be a surprise. Each uses slightly different methodology and data sets, so it would be absolutely miraculous if they were identical.

Wakelin Property Advisory believes that it’s not a case of which data provider is ‘right.’  Rather, given that in most things the truth probably lies somewhere in the middle, we like to consider all of the data sets and then report an average of all the results for the national market. We do the same for the Melbourne market by adding in the recently published data from the Real Estate Institute of Victoria.

National house market

Provider

June Quarter change (%)

Annual change (%)

Australian Bureau of Statistics

0.5

-2.1

RP Data-Rismark

-1.2

-3.6

Australian Property Monitors

0.4

-1.6

Residex

-0.7

-3.3

Average of 4 providers

-0.25

-2.65

 

Melbourne house market

Provider

June Quarter change (%)

Annual change (%)

Australian Bureau of Statistics

-0.4

-4.8

RP Data-Rismark

-3.4

-6.6

Australian Property Monitors

1.6

-2.6

Residex

-1.3

-6.4

Real Estate Institute of Victoria

2.9

-5.3

Average of 5 providers

-0.12

-5.14

 

As long as we can compare the same period of time and dwelling types, by taking an average we can get a representative picture of price movements.  Property prices appear to have been virtually flat over the three months to the end of June, with house prices falling just 0.25% nationally and just 0.12% in Melbourne.

On an annual basis, house price falls have been larger, but remain modest – down 2.65% nationally and down 5.14% in Melbourne.

Importantly, the averaged-out figures pass the smell test. They concur with what we see and hear around the country – that is, prices are probably down around 5-10% or so across our major capital cities over the last 12 months, but that the market has been reasonably steady in the last quarter, as participants begin to respond to lower interest rates.

Whilst these figures are by no means definitive or irrefutable evidence that the property market has bottomed, they should give investors and home buyers a fair degree of confidence that the worst is behind us.