DECEMBER QTR KEY FIGURES
ESTABLISHED HOUSE PRICES
Sep Qtr 03 to Dec Qtr 03
Dec Qtr 2002 to Dec Qtr 2003
|Established house prices|
|Weighted average of eight capital cities|
Established house prices, Quarterly % change
Established house prices, Quarterly % change—December quarter 2003
DECEMBER QTR KEY POINTS
ESTABLISHED HOUSE PRICES
- The price index for established houses in Australia rose 6.0% in the December quarter 2003, compared with an increase of 3.4% in the September quarter 2003. This was the largest quarterly increase since March quarter 1989.
- Prices rose in all capital cities: Brisbane (+12.0%), Darwin (+6.7%), Canberra (+6.6%), Adelaide (+6.4%), Sydney (+5.3%), Perth (+5.1%), Melbourne (+3.8%) and Hobart (+3.2%).
- Contributing to the increase this quarter was a compositional shift towards sales at the middle to upper end of the market (see note on page 2).
- Over the year to December quarter 2003, established house prices rose 18.9%.
CHANGES IN THIS ISSUE
There are no changes in this issue.
- Annual increases in the capital cities were: Brisbane (+35.1%), Canberra (+25.3%), Adelaide (+24.2%), Perth (+22.2%), Hobart (+21.4%), Sydney (+15.5%), Darwin (+13.2%) and Melbourne (+12.5%).
COMPOSITIONAL CHANGE IN ESTABLISHED HOUSE PRICE INDEX IN DECEMBER QUARTER 2003
As noted in paragraph 8 of the Explanatory Notes of this publication, movements in the average price of established houses derived from sales data in each period can be influenced by compositional changes. That is, the prices from one period to the next can relate to houses of different quality and there may be price index movements resulting from a greater or lesser number of transactions at the upper or lower end of the market. It appears that this has been a significant factor in the increase in the established house price index in the December quarter 2003.
Analysis of recent sales data indicates that, in most capital cities, the number of transactions of properties at the lower end of the market in the December quarter 2003 has decreased compared with the September quarter 2003, while the number of transactions of properties at the middle to upper end of the market has increased over this period.
Industry analysts have indicated there is still strong demand for houses in the middle to upper end of the market, which is being influenced by existing home owners looking to upgrade to higher priced homes. In conjunction with this, there has been a gradual reduction in the number of housing finance commitments by first home buyers as a proportion of the total number of housing finance commitments in most States and Territories over the past twelve months. (Housing finance commitments data is published monthly in Housing Finance for Owner Occupation, Australia (cat. no. 5609.0).) First home buyers typically enter the housing market at the lower end.
For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Steve Whennan on Canberra 02 6252 6251.