Sunday, February 23, 2014

Median property price malarkey!

The Weekend Post has continued its fine tradition as an editorial supplement for property advertising: Buoyant property market is hitting a home run in Cairns and Port Douglas

The report cites some booming increases in median house prices in selected suburbs with Edge Hill leading the way at 26.5%. These are median prices and an unusually honest real estate agent is quoted as suggesting the data for the quarter could be skewed for that suburb.

Median prices as an indicator has long been a problem which can misrepresent. More sophisticated indexes have been developed such as Case-Shiller in the USA and the RP Data hedonic index in Australia. The source cited for these median numbers is RP Data. Sadly I don't think their hedonic index is available for regional centres?

The commentary from CairnsWatch February:

Higher property prices in some areas of Cairns are starting to filter through to gentle increases in the median house price. The Cairns median house price trend stood at $369,700 in December 2013, which represents a 2.9% upward movement since December 2012.
I'm sure some sectors and areas have been far more robust and the Post report also notes this is mostly being driven by investors. A 2.9% p.a. (barely above zero real increase) recovery across Cairns from what has been a recessed market does not yet constitute my definition of "buoyant".

Recent weaker labour market trends are also more likely to restrict a stronger broad recovery. Investor activity is interesting given that the decline in vacancy rate trend has also turned recently, despite a weak supply response so far. A component of the increase is likely seasonal in most recent months:

Source: HTW CairnsWatch

Rental vacancy info for Cairns is also available online at SQM Research although not sure on the aggregation methodology here: vacancy rate by region / city

The Cairns Post report also includes a link to Terry Ryder where a report which includes Cairns in Qld top 10 hotspots can be purchased for $180. A positive assessment from Terry on outlook for Cairns property was posted here free at Loose Change 3 months ago:  Reasons to invest in Cairns?

1 comment:

  1. Only those who are Citizens or Residents of Australia should be allowed to own residential property and it is about time our Governments did something about it. The real estate industry go out of their way to jack up prices to increase their profits and everybody pays for it and it is leaving more and more people unable to get a start, prices are way over value compared to what people earn.