01 Dec 2010

National Property Wrap Up

The Australian residential property market has continued to record lower levels of property value growth during July, a concern for some property investors. On an annual basis, capital city property values have recorded growth of 9.7%.

According to the RP Data-Rismark Home Value Index, over the last year individual capital cities have recorded value growth of as much as 13.6% and as little as 2.1%.


Brisbane’s residential property has well and truly underperformed compared to the other capitals since the end of the 2008 lull. Given that during the last two strong growth periods Brisbane has dramatically outperformed the nation, this lower level of growth should have been anticipated. Since December 2008 Brisbane home values have increased by 7.3% and over the 12 months to July 2010 values have increased by 2.1%, well below the long-term average annual level of growth. This provides some welcome relief to first home buyers trying to enter the property market.


Darwin has been one of the country’s strongest performing property markets in recent times and was probably the one region in the world seemingly unaffected by the Global Financial Crisis (GFC). Since the end of 2008, Darwin home values have increased by 24.4% and this growth has only been eclipsed by Melbourne. Over the last year home values have increased by 12.5%, well above the national rate of growth.


The residential property market in Melbourne has been the best performer since the bottom of the market with values increasing by 26.1% between December 2008 and July 2010. Over the last year home values have also been the best performers of all capital cities increasing by 13.6% which is well above the long-term average level of growth. These positive results have provided an opportunity for homeowners to access, the newly gained, equity in their home to purchase an investment property.


In recent times Adelaide could best be described as the steady performer. Since the end of 2008, Adelaide home values have increased by a total of 10.7% and over the last year values have increased by 8.5%, which was just over 1% below the national level of growth. Over the three months to July 2010 Adelaide home values have recorded value growth of 0.2%.


Residential property within Canberra has been performing well since the end of 2008 with property values increasing by 16.9% to the end of July 2010. During the last 12 months property values in Canberra have risen 10.7% and the median price is currently recorded at $490,000 making Canberra the nation’s second most expensive capital city residential property market.

For the remainder of 2010 and into the early months of 2011 we are anticipating softer residential market value growth as the market transitions from a period of strong growth to a period of relatively flat growth.


Following Perth’s substantial boom in values between 2005 and 2007 the residential market has underperformed. Since the end of 2008 Perth home values have risen by a total of 10.4% (only Brisbane has been lower). During the 12 months to July 2010 home values in Perth have increased by just 5.7%. These rather stagnant results will have mortgage owners looking for results through their lender or mortgage broker in the way of refinancing with a lower interest rate.


The Sydney median dwelling price is currently recorded at $520,000, still the most expensive capital city in Australia. Over the last year values have increased by 10.8% which is well above the 10 year average level of average annual growth. Since Sydney home values recorded their most recent low in December 2008, values have increased by 18.4%.


The Hobart residential property market has been the second weakest performer over the last 12 months (behind Brisbane) with property values increasing by just 4.8% despite the fact it is well and truly the country’s most affordable capital city market with a median price of $320,000. Since the end of 2008 home values in Hobart have increased by 12.8%.

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