RP Data-Rismark Property Index

RP Data Ltd Announcement - 2nd October 2007

• The latest RP Data-Rismark Hedonic Index results for July and August 2007 show that the Australian housing market has shrugged off recent interest rate rises and global liquidity crunch to continue its surge in 2007.
• Australian property prices increased by 9.2% in 12 months to 31 July 2007 while indicative results suggest there has been nearly 10% growth in Australian prices in eight months to 31 August 2007 alone.
• Biggest house price rises in 2007 seen in Adelaide, Brisbane, and Melbourne, while Sydney is experiencing a gradual recovery.
• Housing affordability remains a major challenge for mortgage providers and policymakers alike.

Utilising Australia's most comprehensive property database, the latest RP Data-Rismark Hedonic Index results show that Australian property prices continue to rise at a rapid rate despite the US sub-prime crisis and recent increases in the cost of mortgage finance.

According to the RP Data-Rismark Hedonic Index, Australian property prices grew by an impressive 7.7% during the first seven months of the year to 31 July 2007. In the 12 months to 31 July 2007, national property prices rose by 9.2%, which was well ahead of both inflation and the forecasts of most economists.

Tim Lawless, RP Data's Director of Property Research, said "Looking ahead, the indicative RP Data-Rismark Hedonic Index results suggest that Australian property prices will grow by nearly 10% during the eight months to 31 August 2007. This will deliver gains for those households who own their homes, but also create major affordability challenges for individuals in the rental market."

"As a pure investment class, the latest RP Data-Rismark Hedonic Index results show that the Australian property market is pretty much bullet-proof, shrugging off multiple interest rate hikes and the recent liquidity crunch. Yet each capital city is like a separate economy. In order to benefit from this growth you need to be able to diversify your real estate holdings right across the country."

"The flip-side of these price rises is, of course, a further deterioration in housing affordability. Financial institutions need to invest more time and effort considering how they can make the home ownership dream a reality for all those households that are currently priced out of the market. We think that one of the most innovative options to emerge recently is the "shared equity" product from Adelaide Bank."

"It is no surprise that the city with the most affordable homes, Adelaide, where the median house price is just $365,508, displayed the strongest growth in the 12 months to 31 July 2007 with overall property price increases of 17.2%. During this same period, many other Australian cities also saw dramatic price rises, such as Brisbane (17.2%), Darwin (16%), Adelaide (17.2%), Canberra (11.8%), and Melbourne (11.4%)."

"Perhaps the most striking stories of 2007 are the evaporation of the Perth house price boom combined with the turnaround in the Sydney and Melbourne markets. While Sydney and Melbourne experienced very sluggish growth during 2004-2006, the Perth market grew at an incredible rate. However, the tables have turned in 2007. In the first seven months to 31 July 2007, Perth property prices rose by only 2% while Melbourne and Sydney prices have increased by 10% and 5.7%, respectively. Interestingly, the Perth correction is largely restricted to house prices, with Perth apartments continuing to show robust growth." Mr Lawless said.

Sydney retains its mantle as Australia's most expensive housing market with a median house price of $561,199. This is followed by Perth ($508,140), Canberra ($475,554), Brisbane ($424,207), Melbourne ($407,544), Darwin ($385,506), and Adelaide ($365,508). It is interesting to see that the typical Brisbane house is substantially more expensive than the median Melbourne house, which is most likely a function of the tighter supply of properties that exists in Brisbane.

Reflecting on the latest RP Data-Rismark Index results, Christopher Joye, Rismark International's Managing Director, said "Contrary to the gloomy views of many economists over the past few years, Rismark has been predicting since early 2005 that the Australian property market would bounce back and deliver excellent growth in 2007/2008. This forecast is a function of the serious imbalance between housing demand and housing supply, which is now well recognised."

"While some economists have claimed that Australian housing is overvalued by 20% to 30%, Rismark does not believe that you can apply the crude valuation metrics that underpin these statements--such as the P/E multiples used in the stock market--to the complex residential property asset-class."

"Notwithstanding the attractive returns displayed by the RP Data-Rismark Property Index, there are still significant risks for individual home owners who put all of their wealth into one illiquid and risky basket; that is, their own home."

"The RP Data-Rismark Index reflects the risks and returns of a well-diversified portfolio of property. By contrast, investing all of your capital into one asset is a much more hazardous proposition. Property prices do fall, as we saw in Sydney and Melbourne after the last boom ended in 2003" Mr Joye said.

Rental yields are a strong 5 per cent in Brisbane, with yields still high in Canberra, Darwin and Adelaide, while there has been a recent decline in Melbourne because of strong price growth. Evidence of the much talked about rental increases in Sydney is now showing through in yields.

In the apartment market, Perth has the highest median unit price of ($454,809), followed by Sydney ($412,376), Melbourne ($331,903), Canberra ($306,737), Brisbane ($305,432), Adelaide ($294,275) and Darwin ($290,000).

Tim Lawless, RP Data's Director of Property Research, comments "The national apartment market continues to outperform houses, with unit prices rising by 10.2% in the seven months to 31 July 2007, well ahead of Australian house price growth over the same period of 6.9%. However, the indicative RP Data-Rismark Hedonic Index results for August 2007 year-to-date suggest that both unit and house prices will deliver similarly impressive levels of growth of around 11% and 9%, respectively."

Consistent with the performance of the Adelaide market more generally, unit prices in Adelaide have yielded the strongest growth of all Australian cities, increasing by a stunning 27% during the 12 months to 31 July 2007. This is followed by Darwin (21%), Brisbane (17.9%), Canberra (15.1%), Melbourne (13.7%), Perth (12.7%) and Sydney (6.1%).

"In the rental market, the best yielding cities for investors looking to buy apartments are Canberra (6.5%), Darwin (5.9%), Adelaide (5.4%), Sydney (5%) and Brisbane (5%). By comparison, the Perth (3.9%) and Melbourne (4.6%) apartment markets are less attractive." Mr Lawless said.

* The results are "indicative" only, since they rely on a smaller sample of property sales data and do not reflect the MORE comprehensive sales database used to publish the "final" figures.

* The results are "indicative" only, since they rely on a smaller sample of property sales data and do not reflect the MORE comprehensive sales database used to publish the "final" figures.

* The results are "indicative" only, since they rely on a smaller sample of property sales data and do not reflect the MORE comprehensive sales database used to publish the "final" figures.

The RP Data-Rismark Hedonic Indices benefit from exclusive access to the most comprehensive property database in Australian and NZ, which is owned by RP Data Limited (ASX: RPX). RP Data spends over $9 million annually collecting new property information and has amassed a database comprising over 89 million property data records covering around 98% of all homes. Over 70% of Australian real estate agents subscribe to RP Data's property information services.

In a recent independent review of the RP Data-Rismark Indices, the credit rating agency Moody's concluded "The suite of indexes calculated by RP Data-Rismark represents a significant improvement in the quality of housing price statistics available in Australia." Moody;s further commented, "These data are more sophisticated, detailed and have better coverage than that used in the construction of existing housing price indexes in Australia. The high quality of the data makes it possible to implement hedonic indexes, which up to this point had proved difficult to construct in Australia due to data constraints."

For more information on the RP Data-Rismark Indices, please go to http://www.rpdata.com/indices

Background on RP Data:
Established in 1991, ASX-listed RP Data (ASX: RPX) is the largest supplier of commercial and residential property information services throughout Australia and New Zealand and is the first and only provider of only provider of hedonic based Property Indices and AVM's. Subscription clients to RP Data's property information service include over 8,500 real estate agents, valuers, property developers, financial institutions and government departments. RP Data is also the largest supplier of property reports to Australians with over 600,000 property reports issued each year. With an annual investment of more than $5 million in databases, RP Data has more than 88 million property data records covering 12 million properties in Australia and New Zealand including ownership records; 12 million property attribute records; 3.6 million property features records; 16 million property sales records; 12 million property maps; 22 million property photos; and 10 million "on the market" property listing records. For more information visit www.rpdata.com.

Background on Rismark International:
Rismark is a global real estate investment business that specialises in quantitative research, funding, and securitisation. Rismark is a private company owned by management and a number of leading financial services companies. Rismark has executed exclusive strategic agreements with organisations such as Adelaide Bank, PMI Mortgage Insurance, GFI Group (NASDAQ: GFIG), Wizard Home Loans, RP Data Limited, and others. Rismark's management team has extensive experience in quantitative residential real estate research and is augmented by a Global Research Advisory Board comprising of eminent academics from Sydney University, Melbourne University, and Yale. For more information visit www.rismark.com.au.