May 03, 2011 – A survey showed that the biggest quarterly fall in at least 12 years is being posted by capital city home prices. This is due to availability of more stock in the housing market that allows prospective buyers to wait for bargains before buying.
According to the most recent RP Data-Rismark Home Value Index that in the first quarter of the year, capital city dwelling values drop by a seasonally adjusted 2.1 per cent.
Mr. Tim Lawless, RP Data research director, stated that the quarterly change was the steepest since the index series was started in June 1999.
During the month of March, prices were flat and have been down 0.6 per cent over the past 12 months.
The National City dwelling value median price is at $455,000.
Mr. Lawless said that the numbers were being dragged down due to the recent swift build up of housing stock into the market.
Mr. Lawless told AAP that the amount of properties being advertised for sale in the market is about 30 per cent higher as compared to what it was last year.
Mr. Lawless further added that prospective buyers are bargaining for lower prices much more than they used to since more dwellings are available home for sale.
Mr. Lawless explained that since there is so much stock that is available to choose from for prospective buyers, this resulted to more negotiation in the markets and buyers having to sell at lower than what their expectations were.
Compared with the drop of about 5.2 per cent the same time last year, sellers are now selling properties about 6.5 per cent lower than the original asking price on average.
Mr. Lawless said that the recent extreme weather events that include the flooding in Queensland may also have been impacting on the lower numbers of the property prices.
He also added the fact that interest rate speculation seems to be building, and is likely to be going up sooner rather than later, particularly with the CPI figures out just recently.
According to the survey findings, though the residential properties may not have seen any capital growth over the last 12 months, many are still seeing healthy increases in rental yields.
Mr. Lawless said that in contrast to the fall in the home values, an improvement is being seen in the gross rental yields with apartments and houses now delivering in March 2011 a gross return of 4.9 per cent and 4.2 per cent respectively.
Mr. Lawless further added that the capitality average for property values were being pulled down considerably by the two weakest performers where Brisbane is down by 4.6 per cent and Perth down by 3.4 per cent in the quarter to March.
