30 December 2011

RP Data – Rismark Home Value Index Release

In seasonally-adjusted terms, Australia’s capital city home values rose by 0.1 per cent in November, which was the first increase since December 2010. Regional house values recorded a 0.3 per cent (s.a.) rise in November, which was also the biggest increase since December 2010.

Based on around 312,000 sales over the first 11 months of 2011, the market-leading RP Data-Rismark Home Value Index recorded increases in home values across both capital city and regional markets in the month of November following the RBA’s decision to cut interest rates by 0.25 percentage points.

In seasonally-adjusted terms, capital city home values ground-out a modest 0.1 per cent gain (-0.2 per cent raw) in November. House values across Australia’s non-capital city or ‘regional’ markets, which account for about 40 per cent of all homes by number, also rose by 0.3 per cent in seasonally-adjusted terms (-0.1 per cent raw).

Rismark’s director, Christopher Joye, commented, “For Australia’s capital city and regional markets, this was the single best monthly result since December 2010, and augurs well for housing activity during the first quarter of 2012, which we project will rebound solidly. The best proxy for housing demand—the number of new home loans approved for purchasing established properties—has risen robustly every month since its nadir in March.”

The November result has helped improve the Australian housing market’s year-to-date performance. Whereas in October RP Data-Rismark reported that capital city dwelling values had declined by four per cent in the first 10 months of 2011, the November year-to-date index change is now just -3.7 per cent (seasonally-adjusted). In actual raw terms, Australian capital city dwelling values have only declined by -2.8 per cent in the first 11 months of 2011.

Regional markets have performed even better. Over the year to November 2011, regional house values are only off by -2.6 per cent in raw terms (or -2.8 per cent seasonally-adjusted).

Including gross rents, the total return realised by investors in capital city property remained positive in 2011 at +1.2 per cent.

According to RP Data’s Senior Research Analyst, Cameron Kusher, there remains significant diversity across capital city housing markets.

“Although home values have fallen across each capital city, Sydney and Canberra have been the most resilient with dwelling values off just -0.5 per cent (s.a.) and -1.6 per cent (s.a.) over the year, respectively” Mr Kusher said.

He continued, “On the other hand, Brisbane and Melbourne home values have recorded total declines of -7.0 per cent (s.a.) and -5.6 per cent (s.a.), respectively.”

“In the month of November, Sydney, Melbourne, Perth and Canberra produced flat-to-positive capital gains following the RBA rate cut. In contrast, home values in Adelaide, Brisbane and Darwin softened further,” Mr Kusher said.

Rismark director, Christopher Joye added, “The November result is consistent with our forecasts that Australia’s housing market will respond much more quickly to the RBA’s November and December cuts than many analysts expect. Over 90 per cent of all Australian home loans are fully variable rate, and lenders have passed on most of the 0.50 percentage points worth of RBA rate cuts during the final two months of the year. Borrowers can now get fixed-rate loans for around 5.9 per cent and discounted variable rate loans as low as 6.14 per cent. As Australia’s most interest rate sensitive sector, the housing market will be one of the biggest beneficiaries of the RBA’s munificence alongside consumer spending. We expect to see house prices rising again in 2012.”

Ends.

Media enquiries contact:

RP Data: Mitch Koper, corporate communications manager on 0417 771 778 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Rismark: Christopher Joye, Rismark director on 0414 980 264 This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Key statistics, tables and graphs available in the PDF (210kb).