House Price Momentum Slowing As Value Reaches $5.2 Trillion

The ABS released their latest data on Residential Property Prices today. The total value of residential dwellings in Australia was $5,196,355.9 m at the end of June quarter 2014, rising $112,598.5 m over the quarter. The mean price of residential dwellings rose $9,900 and the number of residential dwellings rose by 37,600 in the June quarter 2014. The price index for residential properties for the weighted average of the eight capital cities rose 1.8% in the June quarter 2014 and rose 10.1% through the year to the June quarter 2014. The capital city residential property price indexes rose in Sydney (+3.1%), Melbourne (+1.3%), Brisbane (+1.8%), Adelaide (+1.0%), Canberra (+0.8%), Darwin (+0.7%) and Hobart (+0.3%) and fell in Perth (-0.2%). Recent data suggest momentum is slowing, a little.

ResidentialPricesQOQJune2014Annually, residential property prices rose in Sydney (+15.6%), Melbourne (+9.3%), Brisbane (+6.8%), Adelaide (+5.6%), Hobart (+4.3%), Perth (+3.6), Darwin (+3.4%), and Canberra (+2.2%).

ResidentialPricesYOYJune2014The median price of established houses exceeds $700,000 in Sydney. Hobart and Adelaide have the lowest values. Looking at the rest of the states, beyond the capital cities, NT has the highest value, and QLD exceeds NSW and VIC. Note this data is to December 2013 only, as the ABS does not yet reprot the latest data for the past 6 months.

MedianEstablishedPricesDec2013Looking at attached dwellings, again Sydney is highest, on average, at over $550,000, whereas away from the capital cities, prices are higher in NT and QLD.

MedianHousePricesAttachedDec2013Looking at the number of transfers, momentum is clearly in Sydney and Melbourne. Brisbane is showing signs of upward movement. Note again this data is to December 2013.

NumberofTransfersDec2013Property is too highly priced, compared with income measures, and international comparisons. The long term chronic problem of poor supply, easy loans and high demand continues to be a brake on the broader economy. Household confidence is not buttressed by rising prices. Many continue be be excluded from the market.

Author: Martin North

Martin North is the Principal of Digital Finance Analytics

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