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6416.0 - House Price Indexes: Eight Capital Cities, Dec 2003  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 04/03/2004   
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DECEMBER QTR KEY FIGURES

ESTABLISHED HOUSE PRICES

Sep Qtr 03 to Dec Qtr 03
Dec Qtr 2002 to Dec Qtr 2003
Established house prices
% change
% change

Weighted average of eight capital cities
6.0
18.9
Sydney
5.3
15.5
Melbourne
3.8
12.5
Brisbane
12.0
35.1
Adelaide
6.4
24.2
Perth
5.1
22.2
Hobart
3.2
21.4
Darwin
6.7
13.2
Canberra
6.6
25.3

Established house prices, Quarterly % change
Graph: Established House Prices, Quarterly Percentage Change

Established house prices, Quarterly % changeDecember quarter 2003
Graph: ESTABLISHED HOUSE PRICES


DECEMBER QTR KEY POINTS

ESTABLISHED HOUSE PRICES

QUARTERLY CHANGES

  • 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).


ANNUAL CHANGES
  • Over the year to December quarter 2003, established house prices rose 18.9%.
  • 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%).


NOTES


CHANGES IN THIS ISSUE

There are no changes in this issue.


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.

INQUIRIES

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.



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