The latest results from Residex’s repeat sales series shown house values moved 3.4% higher over the three months ending April 2017 while unit values were up 2.9%. The repeat sales method calculates the capital gain between sale pairs and as such inherently is unaffected by new property sales.
Before we dive into this month’s housing market update, it’s worthwhile reminding our readers about the two different ways Residex measures price changes across the housing market.
Residex has historically produced two measures of price / value growth across the Australian housing market: the non-revisionary median value index (summary results have typically been published monthly on the Residex blog) and the revisionary repeat sales index (updated quarterly with a revised back series and generally relied upon by policy makers as the preferred Residex measure).
The current housing market growth phase has really been all about Sydney and Melbourne. When you look at dwelling value growth, increases have been substantially higher in Sydney and Melbourne than in all other capital cities. At the same time, demand for mortgages has surged across NSW and Vic (both of which are proxies for Sydney and Melbourne) while it has barely increased across the remaining states and territories.
A retrospective look at median dwelling values across the suburbs of Australia shows the bracket creep that has occurred over the current growth cycle, highlighting the deterioration of more affordable housing across the capital cities over the past five years.
At the end of 2016, 7.6% of suburbs nationally had a median house value under $200,000 and 5.9% of suburbs had a median unit value below $200,000. To put these figures into some perspective, 11.4% of suburbs had a median house value of at least $1 million and 3.0% of suburbs had a median unit value of at least $1 million.
There was a time in which having a dwelling worth $1 million or more meant that the property was exclusive and rare. Today dwellings with a $1 million valuation are becoming much more common. At the end of 2016, there were 760 suburbs nationally that had a median value of at least $1 million. This figure has increased from just 275 suburbs nationally five years earlier. Units have been the big mover with the number of $1 million suburbs increasing by 479% over the five years compared to a 160% increase for houses. Continue reading
Residex repeat sales index shows an acceleration in housing market performance across most capital cities over the second half of 2016. Residex recently released the results of their repeat sales index for the December quarter of 2016. The quarterly results showed house and unit prices, based on resold properties, increased across every capital city and housing type with the exception of Perth, where house and unit prices fell, and the Brisbane market, where unit prices were lower.
Table 1: Residex Repeat Sales Statistical Summary – December Data
In the year to November 2016, Australian dwelling values saw an increase of 4.49%. This is above the 3.77% annual growth average since 2009, when Australia felt the effects of the 2008 GFC. However, growth was below the November 2015 figure of 6.63%.
Table 1: Residex Repeat Sales Statistical Summary – November Data
Australian house and unit markets generally performed well over the October quarter, with the median house value increasing 3.05% over the quarter and unit growth of 1.06% in the same period, according to the Residex non-revised median valuation figures.
Growth was likely driven by a combination of low interest rates, relatively positive economic indicators and seasonal factors.
Table 1 displays the stats summary of Residex non-revised figures for the month ending 31st of October.
Table 1:Residex Non-Revised Stats Summary – October Data
Table 1 presents the Residex non-revised growth in median values. These figures suggest the Australian house market grew 1.63% in the September quarter. Growth was driven almost entirely by a strong surge of 1.63% in the month of September, off the back of a slight decline in August. Annual performance of Australian houses was 3.31%, as opposed to 7.2% in the previous year.
Similarly, the median non-revised unit value across Australia experienced 1.27% growth in the September quarter, with 1.17% growth in the month of September alone. Unit values across Australia increased 3.96%.
Table 1: September 2016 Median Value Index
The national housing market has recorded a slight decline in median house and unit values over August 2016 according to the Residex median value index. The falls in median values have been fairly broad-based across the country. The August figures are detailed in Table 1 below (note that Residex median values are non-revisionary and are published monthly. The methodology used to calculate median values is different to Residex’s quarterly repeat sales index).