Australian home prices rise by +1.1% in November with 11.3% cumulative growth in first 11 months of 2009; results driven by robust gains in Sydney (+11.6% for year) and Melbourne (+17% for year)
Based on the rpdata.com residential property database, which is the nation’s largest with over 250,000 sales in the first 11 months of 2009 alone, Australia’s housing market continued to grind out strong gains in the month of November with cumulative double-digit growth recorded in the year-to-date.
According to the market-leading RP Data-Rismark National Capital City Hedonic Index—which is published by the RBA in the Statement on Monetary Policy—Australian home values rose by an indicative 1.1 per cent in the month of November after 1.3 per cent growth in October (October’s initial indicative estimate was 1.4 per cent).*
Over the first 11 months of 2009, Australian home values have now risen by 11.3 per cent following on from their modest 3.8 per cent peak-to-trough falls in 2008.
The most important story of 2009 has been the extraordinary recovery in the Melbourne and Sydney housing markets. In the three months to end November, home values in Melbourne and Sydney have outperformed most other capitals rising by 4.5 per cent and 3.2 per cent, respectively (see attached summary tables for more).
Over the year-to-date, Melbourne has been Australia’s best performing capital city outside of Darwin, generating exceptional capital gains of +17.0 per cent. Sydney home values have increased by more than 1 per cent per month with cumulative growth of 11.6 per cent.
In the first 11 months of 2009, most of the other capital cities have performed strongly with Darwin (+17.9 per cent) leading the way, followed by Canberra (+10.9 per cent), Brisbane (+6.9 per cent), Perth (+6.5 per cent) and Adelaide (+5.7 per cent).
Going forward, RP Data-Rismark will report simple ‘median prices’ for each city and the national market to provide a guide as to housing costs at any given point in time (RP Data-Rismark has not previously reported median prices).**
The median Australian home price in all capital cities over the three months to end November was $439,800 (including houses and units). If we include all regions across Australia (ie, not just the circa 40 per cent of homes located in capital cities), the national median dwelling price is $395,000. (Note: these are the 50th percentile median prices based on the pooled sales over the last three months.)
The median Australian house price in capital cities is $470,000 while the median unit price is $390,000.
The most expensive houses are in Sydney ($550,000), followed by Canberra ($535,000), Darwin ($501,000), Melbourne ($486,400), Perth ($485,000), Brisbane ($449,850), Adelaide ($372,000) and Hobart ($330,000).
Sydney has the most expensive unit market with a median price of $417,000. This is followed by Melbourne ($402,500), Canberra ($390,000), Perth ($385,000), Brisbane ($375,000), Darwin ($357,000), Adelaide ($310,000) and Hobart ($270,750).
In the month of November, detached houses (+1.0 per cent) have underperformed units (+1.3 per cent).
Over the three months to end November, unit values (+3.1 per cent) have also shaded houses (+2.9 per cent).
In the year-to-date, units (+12.5 per cent) have materially outperformed houses (+10.9 per cent) presumably due to the influence of the first time buyers’ boost.
National rental yields tapered slightly in November with the gross annualised rental yield for units being 4.9 per cent while house yields are lower at 4.1 per cent.
-----------------------------------------------------
* This data is indicative and subject to revision. It is typically based on approximately 30-40 per cent of the total population of expected home sales. RP Data ultimately collects roughly 100 per cent of all property sales via its licence agreements with every State and Territory Government Valuer General and Land Titles Office. This information is reflected in subsequently reported index results (ie, in the months preceding the current indicative period).
**The median price is the 50th percentile observation based on all pooled home sales over the three months to end November 2009. This is different to the medians reported by other parties for several reasons. First, where appropriate it includes all property types (ie, not just detached houses, like the ABS). Second, the median value reported by the likes of APM is calculated using a ‘stratification technique’, which is different to the simple 50th percentile observation used here. RP Data-Rismark’s previously reported ‘median values’ were the index values attributable to the RP Data-Rismark ‘hedonic index’, which was originally based at inception on median automated property valuation estimates (ie, the median of a statistical valuation of all capital city homes). The change in the index value over time reflects the underlying capital growth rates generated by residential property in the relevant region. These growth rates are not 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 ‘median values’ are not, therefore, the same as the ‘simple median price’ associated with all homes sold during a given period. In future, we will report simple median prices to avoid confusion.
