House values 2008 - 2010

What's been happening with Australian house values? This article below is from my favorite Newsletter out of every property newsletter there is out there. I can tell you i have read many many many of them. This one also never try's to flog you any products.

This is interesting for this web site and myself because it overviews what has happened to property values in the last two years while i began investing 2008 when i was living in a car and fully homeless and began documenting in this web site with goals, videos etc.

See you get my best secrets here at FPI. Anyway the  source is from here. And the article below.

Australian home values changed little in the month of July, according to the RP Data-Rismark Hedonic Home Value Index.

The Index shows that Australia's capital city home values remained relatively flat in the month of July recording a modest, seasonally-adjusted increase of 0.4 per cent.

The July results follow a 1.0 per cent seasonally-adjusted decline in the month of June; the first negative movement in Australian capital city home values in 17 months.

RP Data's research director Tim Lawless said that the results are further evidence that Australia's housing market has experienced a controlled soft-landing after a resounding recovery during the course of 2009.

"In the period between end 2008 and March 2010, Australian home values rose by 16.3 per cent. Yet monthly growth rates have declined consistently since the start of the year. RP Data and Rismark expect to see the market track sideways over the second half of the year. There is the possibility of modest gains if mortgage rates remain in check and economic conditions continue to improve," he said.

The deceleration in capital growth rates is evident across the cheaper, middle and more expensive suburbs tracked by the `stratified' version of the RP Data-Rismark Hedonic Index.

This index shows that while the most expensive 20 per cent of suburbs realised the highest capital growth between end 2008 and March 2010, these same suburbs have suffered the largest falls in home values in the period since.

Mr Lawless remarked that the top-end of the market is showing higher volatility than lower priced markets.

"Home values in Australia's most expensive suburbs fell more in 2008, rebounded quickly in 2009, and are now tapering at a more rapid rate than cheaper property markets", he said.

"Home values in the most expensive 20 per cent of suburbs were down 2.0 per cent over the three months ending July 2010 compared with smaller declines of 0.4 per cent and 0.7 per cent in the cheapest 20 per cent and middle 60 per cent of the suburbs, respectively."

RP Data-Rismark's Rest of State Hedonic Index, which tracks the 40 per cent of all homes not situated in the capital cities, shows that regional markets have also experienced a synchronous slow-down with house values off -0.2 per cent since April 2010. In recent times, the Rest of State markets have underperformed the capital cities. For example, between end 2008 and July 2010 house values in the Rest of State areas rose by 8.5 per cent compared with much stronger 16.1 per cent growth in the value of detached houses located in the capital cities.

Christopher Joye, Managing Director of Rismark International, said that the data paints an encouraging picture.

"After falling from historically high 70-80 per cent levels, national auction clearance rates have now leveled at around the 60 per cent mark", Mr Joye said.

"While outstanding inventory levels have expanded in response to the weaker demand, they have recently settled.

"Looking forward, I would expect to see the major banks pushing housing credit growth a little harder as profitability gains dissipate", he predicts.

"An increase in credit growth back to reasonable single-digit rates will provide further support to the market in the next 12 months."

Mr Lawless agreed that substantial falls in Australian home values look very unlikely.

"The number of homes being advertised for sale across Australia is only 5 per cent higher than what we saw at the same time last year", he said.

"We aren't seeing a blow out in stock levels and properties are taking on average about 40 days to sell, which is only a little higher than recent experience.

"And while we have noticed an increase in vendor discounting, this is coming off the very low base we recorded during 2009," Mr Lawless concluded.