Property sales hit by disasters
DISRUPTIONS caused by natural disasters and low sales volumes have resulted in soft market conditions across the Australian capital cities.
Capital city values were down 1.6% while the rest-of-state markets saw a -1.2% tapering in values.
The spate of natural disasters in Queensland, New South Wales and Victoria conspired to undermine consumer confidence and as a result housing activity slowed throughout the country.
The sedate conditions in January were in evidence across the board, with all cities registering declines.
In the capital city markets, the RP Data-Rismark Indices reported that dwelling values were off by -1.6 per cent in seasonally-adjusted terms (-0.9 per cent raw) over January, with a similar pattern recorded in the 'rest of state' areas, where house values fell by -1.2 per cent, seasonally-adjusted (-0.1 per cent raw).
The median dwelling price in the capital cities is also down to $465,000 over the three months to end January, while the median in the rest of state markets is cheaper at $325,000.
The national, all regions median dwelling price is $412,000.
The RP Data-Rismark Index previously reported a 0 4 per cent capital gain for the month of December, which has been revised slightly to 0.3 per cent with the addition of further sales data.
According to Tim Lawless, RP Data's research director, the low number of sales in January can give rise to volatile outcomes, which may lead to revisions.
"The volume of sale transactions in January is normally much lower than other months due to the seasonality of the market.
"This year the downturn in activity has been compounded by the spate of natural disasters experienced around the country. It is quite possible that the RP Data-Rismark Index results for January will show a larger than normal revision when updated next month," Mr Lawless said.
Rismark's joint Managing Director Ben Skilbeck added, "There are growing signs of a soft recovery in the housing market after six months of flat dwelling values since May 2010.
"Housing credit growth looks to be rising a little, and the early auction clearance rate data in February has been a demonstrable improvement over the sub-50 per cent clearance rates at the end of last year.
"Our forecasting model implies low single digit capital gains in 2011 based on the assumption that the RBA tightens monetary policy further.
"However it is noteworthy that the futures market is not pricing in the first full interest rate increase until February 2012. If the RBA stays on the sidelines in 2011 there will be material upside risks to our forecasts."
Over the twelve months to the end of January, Perth (-3.8 per cent), Brisbane (-3.7 per cent) and Canberra (-0.6 per cent) recorded a decline in home values.
At the other end of the spectrum Darwin has regained the spectrum, title of the best performing city, recording a capital gain of 4.7 per cent over the year to end January.
This was followed by Melbourne (3.6 per cent), Sydney (2.5 per cent), Hobart (2.2 per cent), and Adelaide (2.0 per cent).