National Media Release

RP Data Weekly Property Pulse

Released: Wednesday 17 April 2013

First quarter is typically the top performer

For the first quarter of every year spanning the past 17 years from the period 1996, the year RP Data started this data collection, to 2012, property growth has experienced the strongest rates of capital appreciation during this time frame on ten occasions according to RP Data research analyst Cameron Kusher.
Mr Kusher noted that the high seasonal nature of the market suggests that the 2.8 per cent value growth recorded over the first quarter of 2013 is unlikely to be maintained throughout the remainder of the year. If the growth rate continued at this level for the remainder of the calendar year, it would represent a rise in capital city dwelling values of 11.2 per cent. However, if history is anything to go by, this rate is unlikely to continue.
Its important to remember that Australias national housing market is highly seasonal with values seeing a greater level of quarterly growth over the first and third quarters of the year and with growth typically lower over the second and final quarters. Between 1996 and 2012, the first quarter recorded the strongest rate of capital appreciation in dwelling values across 10 of the 17 years. In each instance, and where the 1st quarter of the year had not recorded the strongest value growth, it was the 3rd quarter which recorded the greatest value growth. The results highlight the significant impact of seasonality on the change in capital city home values, Mr Kusher said. Further analysis of the todays results show that the 2nd quarter of the year recorded the weakest capital growth conditions on four occasions over the period. On all other occasions, the 4th quarter experienced the lowest growth in values (note over the past two years Q2 and Q4 have recorded identical levels of value growth). Across the period for which the analysis has been undertaken, the 2nd and 4th quarters never recorded a greater increase in value than that of the 1st quarter. Once again, Mr Kusher said that the results re-iterate the high level of seasonality within the housing market and the fact that growth levels over the first quarter of the year wont necessarily be reflective of the performance over the remainder of the year. Although seasonality does have an impact on the performance of home values, the housing market does not sit in isolation to the rest of the economy. As we know, economic conditions can, and do change rapidly. When these come into play, we often see a significant impact on the housing market despite conditions being typically stronger over the first and third quarters and weaker over the second and final quarters. Mortgage rates, unemployment, housing finance commitments, retail trade and consumer sentiment also play a large part in determining the direction of home values and whether or not consumers are prepared to buy and sell their homes, Mr Kusher said. In conclusion, although todays results confirm that capital growth across the housing market experienced a strong start to 2013; Mr Kusher said that we should not expect the same rate of growth to be carried throughout the remainder of the year. Testament to this is the March 2013 RP DataRismark Daily Home Value Index which provides evidence that home values across the five major capital cities fell by -0.1 per cent over the first fifteen days of April despite the strong capital growth conditions experienced recently. The housing market is likely to continue along a recovery path, however, we anticipate slower capital growth conditions throughout the remainder of 2013 than those which have been recorded over the first quarter of the year, Mr Kusher said.

Quarterly change in capital city home values Q1-1996 to Q1-2013 (raw figures)*
8.0%
6.0% 4.0% 2.0%

0.0%
-2.0% -4.0%

2000-Q1

2011-Q1

1996-Q1

1997-Q1

1998-Q1

1999-Q1

2001-Q1

2002-Q1

2003-Q1

2004-Q1

2005-Q1

2006-Q1

2007-Q1

2008-Q1

2009-Q1

2010-Q1

2012-Q1

*Indicates Q1

Source: rpdata, rpdata-Rismark Home Value Index

Quarterly change in capital city home values Q1-1996 to Q1-2013 (seasonally adjusted figures)*
5.0%

4.0%
3.0% 2.0% 1.0% 0.0% -1.0%

-2.0%

2000-Q1

2006-Q1

1996-Q1

1997-Q1

1998-Q1

1999-Q1

2001-Q1

2002-Q1

2003-Q1

2004-Q1

2005-Q1

2007-Q1

2008-Q1

2009-Q1

2010-Q1

2011-Q1

2012-Q1

*Indicates Q1

Source: rpdata, rpdata-Rismark Home Value Index

Strongest and weakest value growth quarters over time across the combined capital cities (raw)

Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Strongest growth qtr Weakest growth qtr Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q3 Q4 Q1 Q4 Q3 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Q3 Q4 Q1 Q4 Q3 Q4 Q1 Q4 Q1 Q2/Q4 Q3 Q2/Q4

Source: rpdata, rpdata-Rismark Home Value Index

DISCLAIMER In compiling this publication, rpdata.com has relied upon information supplied by a number of external sources and RP Data does not warrant its accuracy or completeness. To the full extent allowed by law RP Data excludes all liability for any loss or damage suffered by any person or body corporate arising from or in connection with the supply or use of any part of the information in this publication. RP Data recommends that individuals undertake their own research and seek independent financial advice before making any decisions. 2012 RP Data Ltd.

2013-Q1

2013-Q1