Capital City Movements

House prices in Australia grew by an overall 12.6 per cent during the year ending October 2007 with the unit market pushing through and outpacing price growth in detached houses, according to this week’s RP Data Property Pulse report released today.

Based on the recent RP Data-Rismark Hedonic Index, these latest figures show that overall, property values in Australia grew steadily since the beginning of 2007.

In just twelve months, units increased by 15.1 per cent compared to 11.8 per cent for houses.

RP Data National Residential Research Director Tim Lawless said, “The strong growth in the apartment sector further highlights the affordability situation that has plagued first home buyers and low income families.

“With house prices escalating and forcing first home buyers and low income families out of the detached market, attached dwellings such as units and apartments are now in high demand with owner occupiers and investors finding they are able to secure a property asset with the added bonus of achieving a decent rental yield,” he said.

Across Australia, the median unit value is now $380,100 which is almost $100,000 lower than the median value for houses which is $475,000.  The gross rental yield on a unit across Australia is now 4.8 per cent compared to 4.0 per cent for houses.

Adelaide continues to charge ahead as the city with the highest growth rate.  Houses in are increasing by 22.4 per cent per annum, while units are doing exceptionally well recording a healthy growth rate of 30.8 per cent. 

Mr Lawless said even with such impressive growth, Adelaide is still one of the most affordable markets for housing in the country.

Brisbane and Melbourne are close behind Adelaide with combined house and unit prices increasing at the rate of 19.25 per cent, and 18.39 per cent respectively.  Houses and units in these two cities are each averaging less than twenty five days to sell. 

Rental yields in Brisbane are now slightly higher than in Melbourne with Brisbane houses returning a gross yield of 4.3 per cent on average compared to 3.8 per cent in Melbourne.  Units in Brisbane are returning 5.0 per cent compared to Melbourne with 4.5 per cent.

Sydney, which is the largest real estate market in the country, is gradually shifting up a gear as it continues to show improvements after three years of depressed prices.  Overall, price growth for houses and units is now at 7.4 per cent per annum; this time last year the growth rate was 0.4 per cent

Darwin’s long run of price growth, and Canberra’s short run slowed down over the last quarter.  House and unit prices in Darwin increased by 14.5 per cent over the year with the last quarter recording less than a one per cent movement.  Similarly, Canberra house and unit prices increased by 13.9 per cent over the year with a 1.5 per cent over the October quarter.

Perth is still cooling down with price growth for houses now just 3.2 per cent.  On the upside, the unit market is fairing somewhat better, with prices increasing by 12.0 percent over the year. 

Mr Lawless said the stronger performance of the Perth unit market is due to the dramatic fall in affordability levels in the city over the last two years.

“Leading indicators suggest that the Perth market is slowing further with both the average time it takes to sell a property and the level of vendor discounting both trending upwards,” he said.

Media Inquiries:  Contact Mitch Koper on 041 777 1778 or via email – mitch.koper@rpdata.com

About 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. Subscription clients to RP Data’s property information service include over 8,500 real estate agencies, 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.

RP Data is the first and only provider of Hedonic based Property Indices and AVMs. The RP Data – Rismark Hedonic Indices measure price changes through time by controlling for a property’s location, land size, construction type and specific characteristics (eg. number of bedroom and bathrooms). The Reserve Bank of Australia references the RP Data–Rismark index when reviewing interest rates.

With an annual investment of more than $5 million in databases, RP Data has more than 65 million property data records covering 12 million properties in Australia and New Zealand including ownership records; 11 million property attribute records; 3.6 million property features records; 15.8 million property sales records; 12 million property maps; 16.8 million property photos; and 9 million "on the market" property listing records. For more information visit www.rpdata.com.