Friday, July 17, 2009

Sydney - Melbourne Property Prices Rise - 1 Jul 09

Out today, the monthly RP Data-Rismark International, national Home Value Index confirmed that home values in Australia continued to trend upwards.Australian prices increased by 3.9% in the first 5 months of 2009. In Sydney average values were up 5.2%. Melbourne enjoyed the largest rebound, with average prices up 6.1%.


In terms of property types, units continue to outperform houses. Over the first five months of 2009 unit values increased by 4.5% while house values rose by 3.7%.

RP Data head of research Tim Lawless said, “These latest results herald a national residential market recovery.”

Rismark's managing director Christopher Joye said the recovery has proved key to economic confidence so far this year.

Craig James, chief economist at CommSec, said Australia could rightly claim the title of 'wonder from Down Under' as prices continue to rise.

"It is a simple case of supply and demand," he said. "Demand for homes is being spurred by improved affordability, the fastest population growth in 40 years and weak returns on other assets." The climb in prices should boost activity in the market, Mr James told ninemsn, helping to push prices between 5 and 8 % higher from now until the end of the year.

Alex Joiner, an economist at ANZ, also expects to see "modest growth" in property prices this year.

"These results put beyond doubt the fact that the local property market is not headed for the Armageddon scenario foreshadowed by some and that we will not see house prices fall to the precipitous extent that has been seen in many other advanced economies,"

Dr Joiner added "The recovery in Australia’s housing market, which has defied countless doomsayers, has in turn been the cornerstone of the Australian economy's stability in 2009," he said.

At the same time, the supply of new housing is stalling.

Mr Lawless stated that Investors are becoming increasingly attracted to the strong rental yields that are creating positive cash flow opportunities within key markets around Australia.”


The RBA, which subscribes to the RP Data-Rismark Index data, confirmed its findings in their June Board Minutes,

The Australian Bureau of Statistics housing finance data in April also showed the first signs of a rebound in investor participation.

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