House prices flat as market treads water: RP Data report

The prices of Brisbane apartments increased by 2.3% over November to a median of $360,000, in contrast to a flat capital city housing market, according to the latest monthly update by RP Data-Rismark.

The gain over November means that Brisbane unit prices are now down just 0.8% year-on-year, delivering investors a total year-on-year return of 4.9%.

Brisbane unit investors are getting the second best rental return (alongside investors in Canberra units) across the eight capital cities, with a yield of 5.5%, with only Darwin higher at 6.6%.

The Brisbane detached housing market did not match unit price growth over the quarter, managing just 0.3% to a median of $435,000 to be up 0.4% year-on-year.

The RP Data-Rismark November index shows the eight capital city dwelling prices unchanged at a median of $472,500 – following 1% decline in October – with Canberra (1.3%), Darwin (1.1%) and Darwin (1%) the only capital city markets to record dwelling prices rises of 1% or more.

On a quarterly basis, most capital cities recorded a rise in dwelling values.

The largest capital gains were found in Darwin (3.1%), Perth (3.0%), Brisbane (0.8%) and Sydney (0.6%).

The only cities where values were down over the three months ending November were Canberra and Melbourne (both -0.7%) and Hobart (-4.5%).

“Home values in Brisbane and Perth remain below where they were five years ago whereas the other mainland cities have all increased over this period,” says RP Data senior research analyst Cameron Kusher.

“This has meant that relative to the other capital cities, Brisbane and Perth have experienced affordability improvements, and subsequently we may see them become more popular from both an owner-occupation and investment perspective.”

Melbourne was the weakest capital city housing market over the month and the only to register a decline in its median prices, which fell 1% to a median of $486,000 while dwelling prices were unchanged in Sydney at $555,000.

Year-on-year, dwelling prices are virtually unchanged, indicating a housing market that continues to tread water, but with notable diversion in performance at an individual city level.

Darwin has been the strongest performer with total returns (capital growth plus rental returns) of 20%, followed by Perth (8%), Sydney (5.9%), Brisbane (5.1%) and Canberra (4.9%).

The soft Melbourne is delivering total returns of just 1.2%, compared with a capital city average of 4.2%, while Hobart is the only capital city delivering negative total returns of -2% due to dwelling prices down 7% over the past 12 months.

Kusher says the November market conditions highlight that the road to a market recovery will not be without pauses, and those cities that performed very strongly in 2009 and 2010, like Melbourne, may show continued weakness.

“Capital city home values remain -5.6% lower than their historic highs of 15 November 2010, but, up 2% from their low of late May 2012,” he says.

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