First signs of residential property market recovery: REIA president Peter Bushby

The weighted average median house price for Australia’s eight capital cities increased by 3.8% over the December quarter to a median of $533,099, according to figures compiled by the Real Estate Institute of Australia.

Capital city unit prices rose 2.4% over the quarter to a weighted average median of $436,305, according to the REIA.

On the back of these results, REIA president Peter Bushby said first signs were emerging of a “long awaited recovery for the residential property market”.

“It is well known that for the last year and a half, the housing market in Australia has been performing below the trend.

“To those who have been predicting a housing market crash, I would strongly recommend to take a deep breath and have a look at the results recorded for the last quarter of 2012,” he says.

While Bushby's sentiments reflect those of many property analysts, the extend of price rises recorded in the December quarter by the REIA will raise eyebrows.

REIA figures contrast strongly though with those compiled by RP Data over the same period.

RP Data recorded a 1.2% decline in dwelling prices over the December quarter with houses down 1.1% and units down 1.6% over the quarter.

Australian Property Monitors (APM) had house prices up 1.9% over the December quarter and the ABS recorded a 1.6% rise in capital city house prices.

Eyebrows will also be raised at the REIA reporting the largest increases in house prices in Melbourne over the December quarter - up by 7.8% to a median $555,000.

RP Data records Melbourne house prices down 1.5% over the quarter, though with a similar median of $550,000.

The Real Estate Institute of Victoria (REIV) recorded a 2.4% rise in Melbourne house prices over the December quarter on a seasonally-adjusted basis.

Australian Property Monitors (APM) also recorded a 2.4% rise in Melbourne house prices over the December quarter  with a median value of $525,000.

The REIA records a modest 2% rise in Sydney house prices over the quarter to a median of $656,000 while RP Data records a 2% decline and a median of $665,000.

Figures compiled by the REIA int is quarterly report are not seasonally-adjusted.

Sydney, Melbourne, Adelaide and Perth medians are revised once in the next quarterly release. Hobart, Brisbane and Darwin prices are not revised.

The current quarter estimates are based on a high (75% -90%) sample of final sales, current quarter estimates are compared with the revised estimates in previous quarters. Sydney median prices are adjusted for compositional changes.

The REIA report also notes that rental markets in resource-rich states remained tight.

“Underpinned by low vacancy rates, rents in Western Australia and the Northern Territory increased dramatically.

“Compared to the December quarter of 2011, median rents in Darwin increased 22% for houses and 14.3% for other dwellings.

“In Perth, increases were 9.5% for houses and 10.5% for other dwellings. Such conditions, together with lower interest rates and rising yields attract more and more investors back to the housing market.

“As we have said before, property is a long-run strategy. Remaining optimistic about the future of the Australian housing market, I am pleased to see that at the end of 2012, it finally turned.

“This augurs well for 2013,” says Bushby.