05/11/2009 - 00:00

Indices vary on property values

05/11/2009 - 00:00

Bookmark

Save articles for future reference.

CONTRADICTORY recent indices measuring home values have somewhat muddied the price direction of Perth’s residential property market.

CONTRADICTORY recent indices measuring home values have somewhat muddied the price direction of Perth’s residential property market.

Three different measurements of Perth’s median house price during the September quarter were released during the past week, creating some confusion over the state of the established housing market.

The release of the data coincided with the start last month of the roll-back of the federal government’s temporary first home owner’s boost, from $14,000, for those buying an established home to $10,500.

Data from the Australian Bureau of Statistics show that the city’s median house price index, which does not take into account apartment prices, surged 4.5 per cent in the September quarter compared to the previous quarter.

The index surge is substantially higher than that recorded by Australian Property Monitors, which last week reported a 1.7 per cent rise in the median house price to $494,409.

APM said Perth’s house prices had grown consistently during the past three quarters from a base of $479,381, however the median value for units were a standout, growing 5 per cent in the September quarter to $361,810.

While APM’s assessment was positive, it was contradicted by the release of the RP Data-Rismark National Capital City Home Value Index, which found Perth’s house values had fallen 1.4 per cent to $482,163.

Perth was one of three capital cities, including Brisbane and Hobart, in Australia to record a fall in the median house price, with the other capitals recording an increase of between 2.4 per cent and 6.3 per cent.

The overall strengthening house price would have been a factor for the Reserve Bank of Australia, which uses RP Data’s figures when deciding on the cash rate movement.

The central bank this week lifted the official cash rate to an expected 3.5 per cent, a 25 basis points rise, or a $46.21 increase in monthly repayments for a 25-year, home loan of $300,000.

The indices were all at odds with the Real Estate Institute of WA’s median house price, released last month, which showed a 1.5 per cent increase in the September quarter to $457,000.

The disparate median house values underline the difficulty in pinpointing the state of the residential market, with some market observers saying the sector’s current status is best described as ‘subdued’.

It is also not the first time that some of the house price indices have been at odds with one another, with APM and RP Data posting conflicting price trends for the June quarter.

Then, APM said Perth’s median house price had dipped 0.8 per cent while RP Data showed a 1.2 per cent rise.

REIWA president Alan Bourke previously said he expected house prices to remain steady in the coming year as the Reserve Bank adjusted interest rates further upwards amid an economic recovery.

CommSec chief economist Craig James has forecast the official cash rate to rise to 4.5 per cent a year from now, a level he said would make the RBA more comfortable depending on the strength of the Australia dollar, which was trading at just above the US90 cents mark at time WA Business News went to press.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options