National Media Release

RP Data Weekly Property Pulse

Released: Thursday 15 August 2013

Competition may drive buyers to more affordable markets such as Brisbane & Adelaide
With property values climbing in Sydney and Perth, coupled with competition for stock intensifying in these cities and Melbourne, RP Datas Cameron Kusher said that buyers may start to look at more affordable alternatives and focus their attention on markets such as Brisbane and Adelaide. It will be interesting to see if this starts to happen over the coming months, Mr Kusher said.
Todays Property Pulse looks at median house prices across Australias capital cities and uses the differences as a measure of affordability. Mr Kusher said that while median prices are not a preferred measure for capital growth or losses, the method is a good way to assess other aspects of the housing market such as affordability and what price points homes are currently selling for. Around the cities, Sydney is currently, and has maintained its position as the city to hold the highest median selling prices for homes. Based on July 2013 data, in Sydney the combined house and unit median price was $570,000 which is 16 per cent higher than the median selling price in Melbourne ($492,000), 33 per cent higher than Brisbane ($429,000), 49 per cent higher than Adelaide ($382,000), 15 per cent higher than Perth ($494,600), 87 per cent higher than Hobart ($305,000), 16 per cent higher than Darwin ($490,000) and 14 per cent higher than Canberra ($500,000). Mr Kushers analysis for Sydney shows that in relation to other capital cities such as Melbourne, the price differential has recently started to narrow. He said that while there was little change over the past year compared to Perth, the gap in pricing between Brisbane and Adelaide has become more significant. Between Sydney and Brisbane the price gap is currently at its greatest level since June 2006, while for Adelaide it is at its widest since the middle of 2007. Todays accompanying charts show that over time, the differential in pricing between Sydney and the other major capital cities has compressed. Mr Kusher said he believes that the gap is unlikely to revert to these previous highs. Starting with Melbourne, Sydneys median price is 15.9 per cent higher than across the city of Melbourne and Perths median price is 0.5 per cent higher. The gap in pricing between Melbourne and Sydney is at its narrowest level since February 2012 and for Perth, the gap is at its lowest level since January 2012. Brisbanes median price is 12.8 per cent lower than that of Melbourne which is the widest gap since August 2003. Adelaides median price is -22.4 per cent lower, the largest gap since December 2010. Compared with Brisbane, home prices are higher in Sydney (32.9%), Melbourne (14.9%) and Perth (15.3%). The gap in pricing relative to Perth is 15.3 per cent and has been relatively stable over the past year. Adelaides median price is -11.0 per cent lower than those in Brisbane and the gap has been quite stable since early 2012. The last time Adelaide home prices were higher than in any other major capital city was in November 2004 when the median house price was 0.4% lower. Mr Kusher noted that there is a significant price gap between Adelaide and Sydney, Melbourne and Brisbane prices. Perths median price is 29.5 per cent higher than that in Adelaide and the gap has decreased over recent months.

Sydney home prices relative to other capital cities over time

20.0% Syd : Mel Syd : Bne Syd : Adl Syd : Per Syd : Hob Syd : Dar Syd : Can

0.0%
-20.0%

-40.0%
-60.0%

-80.0% Jul-93

Jul-97

Jul-01

Jul-05 Jul-09 Jul-13 Source: RP Data, RP Data-Rismark Home Value Index

Melbourne home prices relative to other major capital cities over time
60.0% 40.0%

20.0%
0.0% -20.0% -40.0%

Mel : Syd -60.0% Jul-93

Mel : Bne Jul-97

Mel : Adl Jul-01

Mel : Per Jul-05 Jul-09 Jul-13

Source: RP Data, RP Data-Rismark Home Value Index

Brisbane home prices relative to other major capital cities over time
120.0%

100.0%
80.0% 60.0% 40.0% 20.0%

Bne : Syd

Bne : Mel

Bne : Adl

Bne : Per

0.0%
-20.0%

-40.0% Jul-93

Jul-97

Jul-01

Jul-05

Jul-09

Jul-13

Source: RP Data, RP Data-Rismark Home Value Index

Adelaide home prices relative to other major capital cities over time
140.0%

120.0%
100.0% 80.0% 60.0% 40.0%

Adl : Syd

Adl : Mel

Adl : Bne

Adl : Per

20.0%
0.0%

-20.0% Jul-93

Jul-97

Jul-01

Jul-05

Jul-09

Jul-13

Source: RP Data, RP Data-Rismark Home Value Index

Perth home prices relative to other major capital cities over time
140.0% 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% -20.0% -40.0% -60.0% Jul-93 Per : Syd Per : Mel Per : Bne Per : Adl

Based on these results, there is a significant gap in pricing between Sydney and other capital cities. Melbourne and Perth prices are relatively similar with a large step down in median price to Brisbane and then a further large gap to Adelaide prices.
With home values rising at a faster pace in Sydney, Melbourne and Perth than in Brisbane and Adelaide, we expect that gaps in selling prices will increase over the coming months which may then see a shift in focus to the more affordable markets of Brisbane and Adelaide, Mr Kusher said. Note: The median house prices across the capital cities are calculated based over a rolling three month period of sales.

Jul-97

Jul-01

Jul-05

Jul-09

Jul-13

Source: RP Data, RP Data-Rismark Home Value Index

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