02/11/2009 - 10:10

No clarity over Perth house prices

02/11/2009 - 10:10

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The direction of Perth's property market may not be quite so clear cut with latest data from the Australian Bureau of Statistics over house prices putting it at odds with figures released last week.

No clarity over Perth house prices

The direction of Perth's property market may not be quite so clear cut with latest data from the Australian Bureau of Statistics over house prices putting it at odds with figures released last week.

The ABS today released statistics showing Perth's median house price index had risen 4.5 per cent in the September quarter, compared to the previous quarter.

Compared to the same quarter last year, Perth's index rose 4.4 per cent.

The ABS figures are at odds with data out last week from the RP Data-Rismark National Capital City Home Value Index, which showed a 1.4 per cent fall in the September quarter, while Australian Property Monitors recorded a 1.7 per cent rise of Perth's median house price.

Last month the Real Estate Institute of WA reported the median house price had risen 1.5 per cent in the same period to $457,000.

The Reserve Bank of Australia will be using the RP Data figures when it meets tomorrow to decide on the movement of the official cash rate.

Market speculation is that the central bank will lift rates by 25 basis points to 3.5 per cent.

CommSec chief economist Craig James said the ABS figures, which reported a national increase of 4.2 per cent, provided little new information for policymakers.

"The Reserve Bank has made it clear that they focus on the RP Data-Rismark figures rather than the Bureau of Statistics figures, because the ABS figures do not include apartments and are compiled in a different way," Mr James said.

"The RP Data (figures) are substantially lower than the Bureau of Statistics figures and they are seen as a better indication of what's happening in terms of house prices.

"The Reserve Bank's probably going to take little notice of them."

Meantime, WA's Housing Industry Forecasting Group has predicted a modest pick up in new housing activity for 2009/10 and 2010/11 in its latest annual report on the outlook for the state's housing industry.

The group is a joint housing industry and government body that was re-established in early last year to provide independent forecasts and commentary on the WA housing sector.

"Recent reports predicting another housing boom and imminent land shortage are a bit premature," HIFG chairman Stewart Darby said.

"People tend to forget how much speculative housing was built in the last boom. While there is an adequate supply of land to meet foreseeable demand, a number of critical issues do exist regarding residential land supply requiring action by government and industry."

HIFG said there needed to be better information on the stock of existing vacant lots and demolition activity that together are a significant component of residential land supply.

"While HIFG acknowledges the planning reform work underway, all levels of government need to work with the development industry in a timely way to prevent future bottlenecks in land and building approvals," Mr Darby said.

The group is forecasting that WA housing starts in 2009/10 will increase by 8.5 per cent to 20,000, with a further modest increase likely in 2010/11.

"This level of forecast activity is below the notional underlying housing demand of 24,000, based on recent population growth trends, suggesting that Western Australia may be heading for a housing shortage," Mr Darby said.

"However, soft vacancy rates and the volume of dwellings still under construction should provide pressure relief across 2009/10."

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