The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Wednesday, March 31, 2010

Home prices up 1.4% in February...

Key RP Data-Rismark Hedonic Home Value Index results released today:
  • National city dwelling values up 1.4% in month of February
  • National city dwelling values up 12.7% over the last 12 months
  • National rest of state house values up 0.2% in month of February
  • National rest of state house values up 7.0% over last 12 months
  • NB: around 40 per cent of all homes are located outside of the capital cities
Change in RP Data-Rismark dwelling values for quarter ending February 2010:
  • Sydney values +3.8% (median or 50th percentile price: $519,000)
  • Melbourne values +5.4% (median or 50th percentile price: $480,000)
  • Brisbane values +0.4% (median or 50th percentile price: $437,000)
  • Adelaide values +2.5% (median or 50th percentile price: $385,000)
  • Perth values -0.2% (median or 50th percentile price: $475,000)
  • Darwin values +4.2% (median or 50th percentile price: $480,000)
  • Canberra values +2.7% (median or 50th percentile price: $540,000)
Key points:

Based on RP Data-Rismark’s February Hedonic Home Value Index results released today, dwelling values in Australia’s capital cities continued to rise by 1.4 per cent over the month following on from 2.0 per cent growth in January. In the 12 months to end February, Australian capital city home values have increased by 12.7 per cent after values fell by circa 2-3 per cent in 2008.

Following a request from the RBA, RP Data-Rismark have developed a new “Rest of State” Hedonic House Value Index that covers all non-capital city regions across mainland Australia. This has been reported in the RBA’s Statement of Monetary Policy. Interestingly, capital gains have been much more subdued in the rest of state markets with just 7 per cent growth in house values over the 12 months to end February 2010.

This recent growth in capital city home values needs to be placed in context. Based on the latest ABS National Accounts data, per capita disposable household incomes grew by 6.0 per cent per annum over the five years to December 2009 (strictly speaking, this is actually “per household” income growth). At the same time, Australian capital city dwelling values increased by almost exactly the same amount (6.2 per cent per annum) despite the strong growth registered in 2009. That is, dwelling prices have tracked per capita incomes almost 1:1.

A more remarkable statistic is that in the six years to end December 2009, dwelling values in Australia’s largest city, Sydney, only rose by a stunningly low 1.3 per cent per annum. At the same time, per capita disposable household incomes grew by 5.7 per cent per annum.

The January indicative Australian capital city dwelling price growth estimate revised up slightly from +1.8% to +2.0%.

Interestingly, the December indicative was -0.3% but the latest December estimate is still -0.3%.
at 12:10 PM