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Property prices defy dire predictions as ABS confirms stable prices

August 2, 2011

This morning’s release by the Australian Bureau of Statistics of its Capital Cities House Price Indexes for the June quarter is further evidence that the dire predictions of a rout in property prices in 2011 has not occurred, according to Monique Sasson Wakelin, managing director of property investment advisors Wakelin Property Advisory.

“Taking the capital cities together, property prices have fallen just 1.9 per cent over the last 12 months,” said Ms Wakelin.  “After all the talk of ‘bubbles bursting’, a ‘collapse in prices’ and the ‘market in peril,’ we can see that nothing of the sort has happened. Rather, property prices have softened mildly in the last 12 months after a strong run in 2009 and early 2010.”

The latest ABS data reinforces evidence of a slightly softer market emanating from the commercial data providers, according to Ms Sasson Wakelin. “There is a great similarity between the results coming out ABS, RP Data, Residex and Australian Property Monitors. They are all reporting a small annual fall in national or capital cities prices of somewhere between 1 and 2 per cent.”

Property values percentage change, national or capital cities weighted average

Provider

Quarterly Change Mar11-June11,

12 month change, June 10 – June 11

ABS

-0.1%

-1.9%

RP Data Rismark

-0.90%

-2.00%

Residex

-0.83%

-1.19%

Australian Property Monitors

-0.80%

-2.00%

Average of four reports

-0.66%

-1.77%

 

Ms Sasson Wakelin said she hoped the recent data might give the property debate a less shrill tone. “There have been a few commentators out there who have enjoyed their Chicken Little role, predicting that the sky is falling in on property. It is not and less sensationalism from these parties would be a more credible position.”

“I anticipate the market will continue to track sideways until at least the end of 2011.  Unless a major hike in interest rates or a GFC Mark II materialises, I expect this stability will underpin confidence and possibly give prices a lift in 2012 off the back of strengthening demand. Smart investors and first home buyers should be seizing the current opportunity.”