The Real Estate Institute of Victoria’s latest research bulletin has been released giving us December’s statistical data. In December house prices jumped 5.3% to $669,000 and for a year on year change of a whopping 11.7%. Even unit prices that have been hit by an oversupply of stock grew by 1.6%, (511,500) with a year on year movement of 5.7%. Why wouldn’t everyone invest in the property market?
Now we look at the Domain Group housing report for December. Melbourne house price median is $610, 470. This is a quarterly gain of only 0.6% and a yearly growth of 3.4%. In anyone’s language this would be a fairly low growth rate for the year. Unit prices faired a little better in the quarter at 2.6% growth but over the year grew a poultry 2.9%. Why would anyone invest in the property market?
Confused? We can throw in CoreLogic RP Data, another statistical data company, whose annual movement for Melbourne houses was 8.4% and units 1.1%. All of these data companies have one thing in common. They take a sample of the sales and these come from Real Estate agents when the property is sold not settled. That means, it may not be accurate due to error, omission due to confidentiality agreements or the property may not eventually settle.
The only data that would be seen as almost 100% accurate is the data released by the Department of Transport, Planning and Local Infrastructure. This takes a lot longer to filter out due to having to wait until settlement, but it gives a much better long term accurate picture of the market place. The latest data released in December was The Victorian Property Sales Report June 2014. It showed an annual movement in metropolitan house prices of 11.1% and 5.3% for units.
Overall, the data sources are pointing to a year of very substantial positive growth for the Melbourne Metropolitan property market. And this is set to continue and or grow with the Reserve Bank almost certainly going to lower interest rates either tomorrow or in March. This will further stimulate an already warm market. Turnover is the key to growth. And that means that the number of sales is one of the best indicators of price growth. This is not to be confused with numbers of property on the market. It is the number of sales that is usually linked with growth.
Total number of sales across the June Quarter according the State Government were up by 17.9% and the highest number of recorded sales was Pakenham with 227 which had a growth rate of 6.1% for the year on year (June 2013 to June 2014)
And it is the solid turnover that will continue to increase property prices in Metropolitan Melbourne. It is the fact that the media keep the property market in everyone’s thoughts. It is why TV shows like The Block keep rating so well. (I assume everyone is waiting to find out who is eliminated tonight)
If you are considering a property purchase this year, either as an investment or a home to live in, please think about getting some assistance. As you can see there is a lot of information that is freely available on the internet but you need to think about what that data actually means.
Ian James
Director
JPP Buyer Advocates
