It's fascinating to see the reporting of the 0.1% rise in house prices in November, especially in the context of the 10 consecutive monthly falls that pre-dated this wafer thin increase.
The SMH and The Australian on line suggest, via an AAP feed:
"Homeowners have received a bout of good news at year's end, with a private survey showing the first rise in capital city home values in 11 months."
I don't have complete access to the house price data but note that the median national house price was $448,500 in October, down 0.5% from the level in September. The 0.1% rise in November therefore equals a "cash" gain of $400, after a "cash" fall of around $2,200 in October. And it must be noted that in the 10 months to October, the median house price fell around $18,000.
If house prices keep rising at the same pace as they did in November (i.e., 0.1% per month), it will take around 3 and a half years to regain the nominal losses of the first 10 months of 2011! In real terms, even with 3 and half years of 0.1% monthly rises, house prices will be down a further 10% or so over that time.
Not the stuff in my mind that suggests "a bout of good news".
sssh, don't disturb the narrative of newspapers heavily dependent on real estate advertising revenue.
ReplyDeleteDamien - could be something there. Cheers
ReplyDeleteDo you read MB?
ReplyDeletehttp://macrobusiness.com.au/
Great post thank you.
TM.
TM - yes I do. Good stuff. Cheers
ReplyDeleteIt is good news. Finally people will be able to buy their homes without having to be rich. There is a similar problem going on in Argentina. I stayed in a hotel in buenos aires since houses there are old and the owners do not want to recicle it or anything because they know the properties still are at a high price, even if they do not modern it at all!
ReplyDeleteKim