Capital growth over the last 12 months

[Andrew_A]

A telling graph of just how lean the previous 12 months have been in all Australian capitals.The star performer has been Sydney which has recorded a 0.96% growth in house values, the only other capital to stay in positive territory is Canberra at 0.23%. Brisbane has been the worst performer understandably after the floods at -6.04%

Data from July 2010 - July 2011

Sydney +0.96%
Canberra +0.23%
Hobart -0.81%
Melbourne -0.92%
Adelaide -2.44%
Darwin -2.84%
Perth -3.90%
Brisbane -6.04%

 

[hobo-jo]

It's all about the individual deal Andrew_A. Medians are useless. We don't believe in falling house prices on this forum...

 

[jaycee]

sounds about right for me....grumble moan..

 

[Bigtone]

Medians are indeed a croc of ***** and a terrible reference point.

However from what I see if you are talking the average house in an average suburb i was would suggest the figure for Melb is underestimated and would be closer to -7%.

some segments are down 15-20%, others up 4-5% but on average i would guess at -7%.

 

[Kristine..]

Ah well

There are lies, damn lies - and then, there are statistics!

The graph looks great, truly shocking and alarming

But the 'worst' result was an overall loss of 6% for an area which saw significant and multiple natural disasters

In my post code, 6% is the usual discounting factor, so is considered a negotiating margin more than a drop in value. For Brisbane median to be 6% less than the previous record period I would see as only to be expected.

According to data on Invest Smart, the eg Armadale median dropped 2% in the 12 months to January 2011 – however, the median then was $1,480,000 – hardly an impoverished suburb, and over the 3 year period, the median had increased by 36% overall. This would indicate that the growth in the 36 – 24 month period must have been phenomenal and amounted to hundreds of thousands of dollars per property!

However, as a Broker I agree that the previous 12 months has been lean, but the previous 3 years has been surprisingly fat.

I have known 3 year periods with no capital growth but these past 3 years, despite the GFC, have shown strong growth just about across the board.

So while I enjoy looking at graphs and charts as much as the next person, and I do not doubt that there are some areas of Australia which are in decline due to a number of factors, overall it still comes down to the individual property and the market appeal of that property.

And if you, the vendor, is selling the Family Home after 40 years, and you bought it in 1971 for $25,000 and are selling it now for $625,000, I don’t think that a couple of percentage points here or there will cause you to lose any sleep

Cheers
Kristine

 

[hobo-jo]

But the 'worst' result was an overall loss of 6% for an area which saw significant and multiple natural disasters

Brisbane's house prices started falling well before the flood disaster.

And if you, the vendor, is selling the Family Home after 40 years, and you bought it in 1971 for $25,000 and are selling it now for $625,000, I don’t think that a couple of percentage points here or there will cause you to lose any sleep

Too bad for those 200,000 First Home Buyers who bought during the boost period (late 08/2009) at the peak in prices and are now paying 30% more in interest than when they took the loan...

 

[turk]

It's all about the individual deal Andrew_A. Medians are useless. We don't believe in falling house prices on this forum...

Hi hobo-jo

The only person that I can think of on this forum over the last 3 years that has been spruiking that Australian median house prices would only go in one direction has been yourself.

You predicted that from around September '08 that Australian house prices would fall 15-20%.

Would you please tell me what the median was in Sept. 08 compared to the median in July 11.

Please feel free to quote any posts by people spruiking a bull market for the Australin median price continually for the last 3 years.

Cheers

Pete

 

[pieman]

Sydney +0.96%
Canberra +0.23%
Hobart -0.81%
Melbourne -0.92%
Adelaide -2.44%
Darwin -2.84%
Perth -3.90%
Brisbane -6.04%

ok so on my 4m of property I've "lost" about 36k?. Well 18 months agoish I "made" about 400k, so I'll take the 300k+ gain.
I think my super managed by a "professional" fund manager has lost more than the 36k so I think I'll continue to invest in ip's.

 

[hobo-jo]

You predicted that from around September '08 that Australian house prices would fall 15-20%.

Would you please tell me what the median was in Sept. 08 compared to the median in July 11.

Turk, I just said in the thread above that it's about the individual deal, not the median. Medians are useless. I'm sure I could find some single deals that have fallen since their September 2008 peak.

Or given that using a single town to show house prices are still rising is ok:
http://www.somersoft.com/forums/showpost.php?p=825183&postcount=51

Perhaps I could provide a town or subrub that has fallen 15-20% since the 2008 peak?

 

[Andrew_A]

The Residex trading index data which has been used here is in my opinion the best recent performance measure I have found of the total market for Brisbane, keep in mind this includes a very diverse range of suburbs and property types.

Information about the Residex indices & their calculation

You don't buy an index but rather an individual property as has been pointed out, and returns will vary significantly based on the individual deal. Whatever measure you use to display a total market is likely to have flaws, whether anything is useful or not depends entirely what you expect the data to do for you I think.

In the end it's just data and perhaps a reasonable interpretation of the recent performance of the total market, it's not a strategy or a substitute for calculated action in itself.

House prices for dummies

 

[turk]

Turk, I just said in the thread above that it's about the individual deal, not the median. Medians are useless. I'm sure I could find some single deals that have fallen since their September 2008 peak.

The point I make is that when it suits your arguement you find medians
useful, such as when you predicted a 15-20% fall across the board from Sept 08.

The questions still remain

-how accurate was your prediction, of prices dropping 15-20% from Sept 08.
What is the median now compared with 08?

-where are the quotes from anyone spruiking a bull market Australia wide for the last 3 years?

-how far would prices have to now drop to reach that 15-20% level?

Medians over a short time period or small catchment area are pretty well useless, but over a 3 year period Australia wide will give a trend for that time.

 

[Bigtone]

Turk, I just said in the thread above that it's about the individual deal, not the median. Medians are useless. I'm sure I could find some single deals that have fallen since their September 2008 peak.

Or given that using a single town to show house prices are still rising is ok:
http://www.somersoft.com/forums/showpost.php?p=825183&postcount=51

Perhaps I could provide a town or subrub that has fallen 15-20% since the 2008 peak?

I believe you have no logic whatsoever.

The single town (Gladstone) was shown because that other muppett DH was stating because the block auctions failed that the whole australian market was stuffed. I was simply highlighting that if u use isolated events then your conclusions will be incorrect.

In the post in this thread I have said that I believe the falls in Melb are understated so to say that using Gladstone was attempt to suggest the whole market is rising is just wrong. What it does highlight however is the advantages of having a diverse property portfolio, while my values in melb may be down a few hundred k's that has been more than made up for in Gladstone and net across the portfolio only $100-$150k down for the year, chicken feed in comparison to recent gains.

As for first home buyers in 2008-2009, any with a brain who bought in Melb are miles ahead, I know many that have had their lives changed forever in a very positive way buying at that time.

As Turk says u r the only person who goes on and on about the prices always rising. Why u come to this site is beyond me.

 

[hobo-jo]

how accurate was your prediction, of prices dropping 15-20% from Sept 08.

I stand by that prediction so I guess we'll see. I can't remember exactly when I started suggesting 15-20% (I'd have thought mid 2009 when seeing the effects of the boost), but if it was September 2008 then you excuse my timing being a little off given the vendors boost which started 1 month later

Also, actions speak louder than words. I didn't sell until Jan 2010

I will be heading to an auction this weekend infact which is on same sized block, similar house, a couple of hundred metres from where I owned, so will be interesting to see what it goes for.

 

[pieman]

ok so on my 4m of property I've "lost" about 36k?. Well 18 months agoish I "made" about 400k, so I'll take the 300k+ gain.
I think my super managed by a "professional" fund manager has lost more than the 36k so I think I'll continue to invest in ip's.

According to "the Hun" I've "made" about 200+k in 6 months.
Not bad, not quite as good as gold but how do you leverage into gold like you do property AND get a roof over your head.
Gotta love property
Suck it in doom and gloomers worlds going to end, glass half full people

 

[Belbo]

According to "the Hun" I've "made" about 200+k in 6 months.
Not bad, not quite as good as gold but how do you leverage into gold like you do property AND get a roof over your head.
Gotta love property
Suck it in doom and gloomers worlds going to end, glass half full people

What's "the Hun"?

 

[pieman]

The sun newspaper, they reckon quite a few suburbs in Melbourne had rises over the last 6 months. The reality is it's too short a timeframe, but if it went down and the doom and gloomers saw it, they would be frothing at the mouth with the falling re prices

 

[Aaron_C]

The sun newspaper, they reckon quite a few suburbs in Melbourne had rises over the last 6 months. The reality is it's too short a timeframe, but if it went down and the doom and gloomers saw it, they would be frothing at the mouth with the falling re prices

A house in Brighton just sold the other day for $6.4m. What crash?

 

[pieman]

....and there were 4 bidders over 6m

 

[eeew]

Just my opinion, but think we have seen bottoms now [ with the exception possibly of brisbane, perth is too tough to call]. I cant see sydney and mel going further down in the remainder of the yr. There are a few reasons for this:

1. Supply has reduced a bit, not by much but a bit.
2. The $A has come down, making them more affordable to overseas investors. Cnotinued issues in US/Europe and also the Middle east cannot be solved in the near term, so volatility, uncertainty will reign in the short term. This has tendencies for the $A to fall against the $US.
3. Other investment classes especially shares are so damn volatile, investors are seeking more safer places such as fixed/physical assets like gold and property.
4. Tough to see interest rates increase for the rest of the year. Yes, inflation is high, but the RBA has already said they think its manageable and that a lot of it is due to 'one off' factors such as floods etc earlier in the year. Last time I read, the market has priced a 50% chance of a .25% cut in sept [ or a 50% chance of hold in sept- markets pricing 0% chance of rise in sept]. I generally agree, they will either be cut by .25% or left or hold. The threat of rising rates for the year seems to be muted [ not the case 3 months back].More and more investors are thinking the same.
5. Buyers have realised that vendors wont keep discounting. Properties that have been discounted have pretty much been as much as they can. And with rates either on hold/falling in the next few months investors are thinking the market may have bottomed out. I think we will see in around Nov-dec that prices will regain an fair amount of lost ground, but not all of it.

 

[Belbo]

The sun newspaper, they reckon quite a few suburbs in Melbourne had rises over the last 6 months. The reality is it's too short a timeframe, but if it went down and the doom and gloomers saw it, they would be frothing at the mouth with the falling re prices

Oh! That's the Hun. So I can put away the Enfield now, right?