By Guest Blogger, Terry Ryder, founder,
hotspotting.com.au and propertyU
Media reporting of price data continues to create confusion for real estate consumers, because writers fail to analyse the different figures coming from multiple research sources.
It’s common for different research firms to have contrasting figures on the same market - and often one source contradicts another. Media reports each set of figures as fact, in isolation, without any recognition of the discrepancies between the different sources.
I’ve gathered the latest data on annual changes for house prices in the eight state and territory capital cities from four major sources.
There are numerous points of confusion:
- Sydney prices are now higher than a year ago, according to SQM Research, but the other three sources disagree - and the ABS still has Sydney down 10% (but I should point out that the ABS data always lags well behind the other sources).
- Melbourne is no longer falling, according to two sources, but remains down on a year ago according to the other two (including 10.5% based on the ABS index).
- Two sources say Adelaide is up a little and two say it’s down a little.
- Everyone agrees that Perth remains down, but while SQM says it’s only 1.6%, CoreLogic says it’s still big at 8.6%.
- Canberra is up 3%, if you believe CoreLogic, or down 2%, if you prefer the SQM data.
- All four sources record continuing decline in Darwin, but while SQM suggests the downturn is almost over, CoreLogic claims the Northern Territory capital is still 10% lower than last year.
- Everyone agrees Hobart remains up, but the growth numbers range from 1.3% to 9.5%. In other words, one says the Hobart mini boom is over while another says it’s still raging.
How do you make sense of this? The answer is: you can’t. These numbers are essentially worthless to anyone who wants to really understand what’s going on in major markets. They all have their own (flawed) methodologies and they’re all generalisations about complex markets where there can be multiple scenarios playing out within one city.
Here’s my take on it:
- Both Sydney and Melbourne are recovering from their post-boom corrections. Many suburbs have price levels which have risen in the past 3-4 months but remain lower than a year ago. But there are differences within these cities: in many suburbs, unit prices are higher than a year ago, but house prices are not.
- While the figures suggest there’s not much growth in cities like Brisbane and Adelaide, when you look a little deeper you find there are precincts in both cities where prices have been growing - and, in some cases, quite strongly.
- The generalised data suggests Perth is still falling but there are many suburbs where price levels are higher than a year ago.
- Darwin is the only capital city where there’s little evidence of growth in house prices, but vacancies have fallen and there’s evidence of rental growth, so price uplift may not be too far away.
- Canberra remains a solid market and there are individual precincts delivering solid price growth.
As is always the case, the data published by the major research entities overlooks the important markets to be found in regional Australia. There are dozens of growth markets to be found in Victoria, New South Wales, Queensland, South Australia and Tasmania – many of which are growing at rates measured in double digits.
To have one of our friendly Buyers' Agents to contact you:
or
call us on 1300 655 615 today.
