Perth the standout performer while Brisbane bottoms out as house values tread water in October: Residex

Perth the standout performer while Brisbane bottoms out as house values tread water in October: Residex
Perth the standout performer while Brisbane bottoms out as house values tread water in October: Residex

Perth detached house values have risen more than 5% over the past three months to October in contrast to an otherwise stagnant national housing market, the latest Residex figures show.

Residex chief executive John Edwards is anticipating a stronger 2013-14, saying increases in both rental and capital growth should be higher "than what has been seen in a number of years".

However, he expects that “the market will again retreat” around 2015.

“Markets like Brisbane, Perth and Darwin are likely to see a continuation of stronger rates of capital growth; however, these areas could see growth that causes corrections of larger magnitudes than other markets in the longer term, as Residex expects the RBA to make further interest rate reductions in an attempt to stimulate non-mining areas of the economy,” says Edwards.

The October figures show that while Perth detached house values registered only a small gain (0.42%) over the month, they are up 7.47% for the year to October to a median value of $500,000.

Sales activity in Perth has also been strong, up nearly 20% for the year with more than 25,000 sales recorded.

National house values have hardly moved over the month (-0.18%), quarter (-0.05%) and year (-0.51%), with the national median detached house value being $429,500, despite a 7.25% rise in the number of sales to 293,000.

The October Residex figures suggest some green shoots of recovery in Sydney, with house values starting to trend up – rising 1.36% for the month, up just over 2% for the quarter, and up 3.14% for the year to October with a median value of $677,500.

Darwin is the only other capital city detached housing market to be in positive territory for the year – up 3% to a median value of $512,000 – though values have come off in the last quarter.

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Melbourne house values have been treading water over the past three months, but are still down 3.15% for the year with a median value of $556,500.

Brisbane house values are unchanged for the year at a median value of $432,000, but have risen over the past month (1.1%) and quarter (1.63%) suggesting the market may have bottomed out.

Edwards says Brisbane has been in a relatively long period of correction and "is now clearly indicating that the correction period has passed".

 


 

Perth has been the strongest performing unit market over the past year, with values up 13.75% to a median of $431,000, with Darwin (8.77% rise to $420,000) and Sydney (2.96% rise to $500,000) the other capital city unit markets where median values have risen over the year to October.

Nationally, unit values have performed marginally better than houses and are up 2.13% for the year to October with a median value of $403,000.

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Edwards says Perth has been the “standout capital city performer”, adding that it has been “a better year for most Australians as far as the housing market is concerned”.

“Consumer sentiment is improving. The Westpac Melbourne Institute Index of Consumer Sentiment posted a rise of 5.2% from October in November, finally bringing it above the 100 point mark to 104.3.

“At last it seems RBA interest rate reductions may be having an impact. However, I suspect that the reduced negative press about the problems in Europe may also be playing an important role.

“I also have a suspicion that the number could have been even better if the coverage of the potential that the mining boom is coming to an end had not been so prominent in the media,” he added.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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