According to Residex, as reported in On The House, the national housing market has recorded a slight decline in median house and unit values over August 2016 according to their median value index. The falls in median values have been fairly broad-based across the country.
This continues the confusion about where house prices are going, as we discussed recently. The different data sources appear to be diverging.
The August figures are detailed in Table 1 below (note that Residex median values are non-revisionary and are published monthly. The methodology used to calculate median values is different to Residex’s quarterly repeat sales index).
Table 1: August 2016 Median Value Index
Source: Onthehouse.com.au
Across the nation, median house values fell by 0.86% in August and unit values declined by a very similar 0.87%. While most regions have recorded a decline in median values in August, it is quite a different picture over the past 12 months.
Median house values have increased over the 12 months to August 2016 in most regions of the country and are 6.58% higher nationally. In comparison, seven of the 16 regions published in Table 1 have recorded a fall in median unit value over the past year. Nationally, median unit values have increased by 2.91% which is less than half the rate of growth of in house values.
When we look at the median house and median unit data over time, it shows that house and unit values are now below their peak in all regions. The magnitude of these declines varies significantly on a region-by-region basis as well as across different property types.
Graph 1 below highlights the magnitude of decline in median house values from the respective market peaks across the capital cities and nationally.
Graph 1: Change in median house values from their respective peak to August 2016
Source: Onthehouse.com.au
Across the country, median house values are 0.9% lower than their previous peak. In terms of the greatest declines from peak, they have predictably occurred in the regions which have the greatest exposure to the resources sector. Regional Western Australia has been hardest hit with median house values 22.6% lower than they were at their peak. Perth, Darwin and Regional Northern Territory house values have also recorded substantially falls from their respective peaks, down 8.8%, 9.5% and 7.9% respectively.
In all other regions analysed, the decline since the market peak has been less than 5%.
Graph 2 following highlights the decline from the respective market peak to August 2016 for median unit values across the major regions of the country.
Graph 2: Change in median unit values from their respective peak to August 2016
Source: Onthehouse.com.au
The results show a similar picture to what has unravelled for housing, with those regions linked closest to the resources sector having recorded the greatest value declines. At a national level, median unit values are currently 0.9% lower than their peak which is an equivalent decline to that recorded for houses. The regions with the largest overall declines in median unit values have been: Regional Western Australia (15.1%), Regional Northern Territory (14.1%), Darwin (13.7%), Perth (11.3%) and Regional South Australia (8.4%).
Across most regions of the country median house values have recorded more moderate overall declines than units however, there have been a handful of exceptions. In Sydney, Melbourne, Brisbane and Regional Western Australia, the overall decline in median house values have been greater than median unit value declines.
