House Prices Show Early Signs of Stabilizing

Investors could be running out of time to find a bargain, with Australian Property Monitors (APM) predicting the property market will pick up in 2012. Despite softer conditions in 2011, senior economist Andrew Wilson says the company’s quarterly House Price Report indicates better times are ahead.

“Early signs are emerging of increased first homebuyer and investor activity in most markets, albeit from a low base, that will help to encourage market activity and confidence,” Wilson says.

APM predicts Brisbane will be one of the first cities to gather momentum. Brisbane median house prices have fallen by 1.3 per cent in the June quarter and 4.9 per cent over the past 12 months. However APM says it’s unlikely there will be further drops and “buyer activity in Brisbane should increase as the reconstruction effort gathers pace, with prices starting to stabilise into 2012.”

Sydney and Melbourne also showed slightly better results over the last quarter. Prices in Sydney increased by 0.1 per cent, after falling 0.5 per cent in the previous quarter.

Melbourne house prices showed a tiny improvement too, with the median now at $554,610. “Melbourne house prices were steady over the quarter and Melbourne was one of only three capitals not to record a decline in median house prices,” Wilson says.

“Australia’s two largest capital city housing markets are exhibiting resilience, and with the exception of Darwin, the Sydney and Melbourne housing markets have proved to be the best performers over the year.”

He adds Sydney and Melbourne fell by 0.2 per cent and 2.1 per cent over the entire 12-month period, but this is actually a pretty good result.

“This is an encouraging result for market stability, considering both cities recorded extraordinary nation-leading house price growth in the 18 months between December 2008 and June 2010, rising by 19 per cent in Sydney and 28 per cent in Melbourne.”

Perth, however, continued to fall in the June quarter by 1.5 per cent. Adelaide house prices fell by 2.1 per cent, but in contrast, unit prices rose by 1.1 over the quarter.

Hobart median house prices were flat, but units had the largest recorded fall for all the national capitals, down by 3.3 per cent.

Darwin house and unit prices also recorded disparate results, with median house prices falling by 3.6 per cent, but unit prices increased by 3.6 per cent over the quarter.

“In the June quarter, diverse local conditions had a more significant impact on median prices in each city, with these individual factors expected to have continued variable effects on growth in each market,” Wilson says.

“This is in contrast to the effect of national market conditions that have impacted prices across the board until recently. The prospect remains, however, of increased buyer activity emerging through the spring selling season.”

House prices over the past 12 months

Houses

June 11

Mar 11

Dec 10

Jun 10

QoQ%*

YoY%**

Sydney

$644,658

$644,098

$647,437

$646,200

0.1%

-0.2%

Melbourne

$554,610

$554,526

$560,578

$566,220

0.0%

-2.1%

Brisbane

$446,778

$452,643

$460,366

$469,873

-1.3%

-4.9%

Adelaide

$441,775

$451,479

$453,649

$456,489

-2.1%

-3.2%

Canberra

$551,065

$566,809

$569,783

$565,803

-2.8%

-2.6%

Perth

$535,617

$543,878

$548,976

$568,449

-1.5%

-5.8%

Hobart

$329,307

$329,307

$344,275

$338,091

0.0%

-2.6%

Darwin

$593,642

$615,977

$621,844

$585,829

-3.6%

1.3%

*QoQ = quarter on quarter. **YOY = year on year

Source: www.apimagazine.com.au

Posted on Thursday, July 28 2011 at 1:11 AM

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