Adelaide house prices 2009

Australian home values recorded a healthy 2.8% increase over the first four months of 2009

The RP Data/Rismark Australian Home Value Index out today confirmed that housing values around Australia rose by a healthy 2.8 per cent over the first four months to April 09—virtually wiping out the price falls seen in 2008 according to RP Data National Research Director Tim Lawless.

Over the first four months to April 09, every mainland capital city apart from Perth recorded an increase in home values with the most significant gains in Darwin (+5.3 per cent), Melbourne (+4.4 per cent), and Sydney (+3.9 per cent).

The recent growth in the Australian residential property market has fuelled speculation about a ‘bubble’ developing in the first home buyers market but RP Data’s Mr Lawless believes these claims are largely unjustified.



“Home values in Australian capital cities mortgage belts, which are the prime first home buyer markets, were flat or falling between 2004-07 while the inner city and affluent markets enjoyed consistent growth. In 2008-09 we have seen a reversal of these fortunes,” he said.

Mr Joye adds “While first-time buyer activity has certainly supported the market, people forget that 70-75 per cent of home buyers are not first timers. Also, lending standards are more conservative today than they have been for over 15 years with maximum borrowing ratios being consistently reduced.”

The return to capital growth comes as weekly rental rates start to level.

Mr Lawless said, “Rental rates across Australia have powered ahead over the last three years, providing the best gross rental yields investors have seen for a long time.

“We are now seeing growth rates for weekly rents start to level due to decreasing rental affordability which is causing many renters to consider buying a home instead of renting.

“Gross rental yields are likely to peak over the coming months suggesting that now is probably the best time for investors to roll up their sleeves and become active,” he said.

In terms of housing stock, units are continuing to outperform houses where over the first four months of 2009 values increased by 3.3 per cent while house values increased by 2.7 per cent.

In closing Mr Lawless said “The stronger performance of the unit market is due to a number of factors. Comparing median house and unit values nationally, the price gap between is just over $90,000, so the value proposition of a unit is very compelling. Additionally, units are generally located closer to the city and along transport spines which is very appealing to many Gen Y and Gen X buyers,” he said.

The monthly Australian capital city home value changes are as follows: January (+0.1 per cent); February (+1 per cent); March (+0.6 per cent); and April (+1 per cent). The April index results are indicative and may be subject to small revisions.


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