Australian Property News

Evidence the property market could be bottoming

Posted on Tuesday, January 31 2012 at 3:54 PM

Signals of a bottoming market are evident as the December quarter reports the year’s smallest quarterly decline, according to RP Data director of research Tim Lawless

In RP Data-Rismark’s December Hedonic Home Value Index results, Sydney and Hobart took the lead in price growth for the December quarter, while Darwin outperformed all capitals in gross rental yields.

This latest price growth revision doesn’t come as a great surprise though, as December is typically a month with lower sales volumes, reported RP Data-Rismark.

Following November’s confidence boosting price growth, December results demonstrated a weakening in capital city dwelling price growth of -0.2 per cent seasonally adjusted, compared to a revised 0.4 per cent rise in November.

Sydney was the strongest performer over the December quarter, seeing positive growth of 0.7 per cent seasonally adjusted; Hobart also demonstrated positive signs with growth of one per cent seasonally adjusted in the three months to November 2011.

Perth still sits at the bottom of all capitals in growth terms, with values shifting downward to 2.1 per cent seasonally adjusted for December.

In gross rental yields, Darwin outperformed the nation with a gross rental yield of 5.6 per cent growth for houses and six per cent for units; Melbourne demonstrated the lowest gross rental yields with four per cent for houses and 4.3 per cent for units.

While a decline was reported across capital city home values for December, Lawless said it was the year’s smallest quarterly decline, a sign that the market could be hitting the bottom.

“According to our index, capital city home values fell by 1.5 per cent seasonally adjusted in the March quarter, and by a further -0.8 per cent seasonally adjusted in each of the June and September quarters. This rate of decline had decelerated to -0.5 per cent by the final quarter of 2011,” said Lawless.

Compared to the giant 14 to 15 per cent decline in shares, Australian capital city dwelling values saw a more minimal loss of about 3.5 per cent, while regional house values only corrected by around three per cent, said Lawless.