Price

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Forecasters are setting themselves up to fail when they make very exact predictions about future price growth.
I've long been puzzled by economic forecasters predicting, for example, that Brisbane house prices will grow 7.4% in 2014-15 (not approximately 7% or 8%, mind you, but exactly 7.4%) and then exactly 7.5% in 2015-16 – as QBE has done with its Australian Housing Outlook report, with the help of BIS Shrapnel.
What micro-economic event will occur in 2015-16 to cause Brisbane's average price growth to limp 0.1 of a percentage point higher in that year, compared to the previous year?
Why will Melbourne prices grow exactly 2.2% in 2015-16 and then decrease exactly 0.7% in 2016-17?
What chance the forecasters will be right? I would suggest zero (and that's an exact figure I can predict with confidence).
Has this kind of forecast ever been exactly right in the past? No. I've checked and I can't find an instance of an accurate prediction.
So why do it? Why pretend you can predict city price growth two or three years into the future, down to the last decimal point, when it's not remotely possible to be right?
The most likely answer is: to drum up a bit of publicity, comfortable in the knowledge that most media outlets will publish this nonsense without asking a single question. And even more comfortable in the knowledge that no one will check in three years to see how accurate the forecasts were.
Louis Christopher of SQM Research commented earlier this year that organisations who make big claims or extreme forecasts for publicity reasons rely on "the community's collective amnesia" to cover their tracks. In other words, they can relax, knowing that no one will bother to check on the results of their forecasts, much less hold them to account for them.
Even more alarming about this forecast report is that it is fundamentally based on data from the Real Estate Institute of Australia.
It lists Real Estate Institute of Australia (REIA) figures for the previous decade and then extrapolates forward, with predictions for the next three (financial) years.
The Melbourne figures are particularly rubbery. According to the REIA, Melbourne prices rose a tad under 20% in the financial year that ended on 30 June.
Such a figure is fanciful. All the other major research sources contradict it. RP Data says 9%, Australian Property Monitors says 10% and the Australian Bureau of Statistics says 9%.
Even more spectacular, the REIA claims Melbourne prices rose almost 27% in 2009-10.
As I have written <a href="finding/29366-reia-s-market-facts-report-victorian-stats-all-wrong" target="_blank">previously in this column</a>, the institute's figures for Melbourne growth are good for a laugh, but no one sensible gives them any credibility.
I've called the REIA to account numerous times in the recent past on the accuracy of its price data – and now the institute refuses to send me their figures. Fortunately, it's not difficult to get a copy of their reports from other sources.
The one thing that does make sense about the QBE report are the general themes, in terms of which locations are likely to rise and which are not.
For example, it suggests Brisbane will be the leading city for growth in the next three years, and that makes some sense. It also suggests that Adelaide and Hobart will do better than Melbourne, Perth, Canberra and Darwin, and that generally aligns with my own thoughts, based on our research.
It forecasts growth in some of the key regional centres, such as Newcastle, Wollongong, Ballarat, Bendigo, Cairns, Townsville, the Sunshine Coast and the Gold Coast – and that also makes sense.
But the exact numbers they have applied to those cities for price growth in the next three years? Give me a break.
Terry Ryder is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email</a> him or contact him on <a href="https://twitter.com/hotspotting" target="_blank">twitter</a>.
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terryryder-YECXbqmri2

When people pretend they can predict exact property price growth, there's a 0.00% chance they'll be right

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The rate of price growth in the housing market has peaked, with prices to grow modestly over the fourth quarter and beyond, according to LJ Hooker’s Buyers’/Sellers’ Market Index.
Sellers were in favour over the third quarter, but now it’s buyers that may be given the upper hand.
In New South Wales, Victoria and Queensland, the third quarter recorded the ninth of favourable selling conditions. This is indicated by statistics that show sales outstrip listings.
Meanwhile, in Western Australia and the ACT the markets remain balanced, while Tasmania has been in favour of buyers.
While sellers were still in favour in the third quarter, LJ Hooker national research manager Matthew Tiller said that it was important to note that the index was a record result for sellers and may have reached its peak.
“According to the ABS [Australian Bureau of Statistics], the rate of growth of finance commitments peaked in the second quarter after considerable growth over the last three years,” said Tiller.
“As price growth returns to a more sustainable level and listings come on to the market for the spring and summer selling seasons, we forecast a gradual shift back towards a buyers’ market,” he said.
Western Australia, Tasmania and ACT offer immediate future and opportunities for house growth, according to LJ Hooker head of real estate Christopher Mourd.
“LJ Hooker’s network of offices are commonly reporting that many owners are viewing the low interest rate environment as an opportunity to upgrade,’’ said Mourd.
“However, many won’t commit to listing their home until they’ve found their next home. This preference has created a shortage in supply, and heavily weighted the index in favour of sellers going to market now,” he said.
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" alt="">
Source: LJ Hooker
{mijopolls 45}
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jduke-EHk3XBmHkn

Market's price growth rate has peaked: LJ Hooker

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While it seems that the national growth rate has moderated somewhat, a number of capitals are still recording solid growth figures.
However, the month of September was largely flat across the board, according to RP Data. Over the three months to September 2014, Sydney remained the stand out, recording 4.1% price growth, while Hobart dropped by 1.0%.
RP Data national research director Tim Lawless said that September’s overall growth across Australia, at 2.9%, was indeed driven by Sydney and Melbourne. Melbourne recorded 3.7% growth, while Adelaide also saw a strong uptick of 3.1%.
"The annual rate of appreciation in dwelling values has actually been moderating since reaching a peak in April this year," said Lawless.
"The fact that the annual trend of capital growth has been trending lower is an important factor to note as it highlights that the rate of capital gain is no longer accelerating," he said.
He did not that housing market conditions remain buoyant, but said that the 12 month trend is drifting lower since an 11.5% peak in April. 
"A moderating annual trend, as well as the relatively flat September result, is likely to be welcome news to policy makers and potential buyers after the winter months recorded the largest capital gain since 2007.
"The softer September result is also likely to be seen as a positive indicator by the Reserve Bank which has recently raised concerns about the level of value growth and speculative investing in the Sydney and Melbourne housing markets," Lawless said.
CAPITAL CITY SEPTEMBER MONTHLY GROWTH, MEDIAN DWELLING
 Sydney Month: 0.8% Quarter: 4.1%  Year on year: 14.3%  Median: $655,000 Melbourne Month: -0.8% Quarter: 3.7%  Year on year: 8.1%  Median: $535,000 Brisbane Month: 0.7% Quarter: 0.6%  Year on year: 6.4%  Median: $440,000 Adelaide Month: 0.9% Quarter: 3.1%  Year on year: 5.8%  Median: $390,000 Perth Month: -0.4% Quarter: -0.6%  Year on year: 3.2%  Median: $515,000 Hobart Month: -0.3% Quarter: -1.0%  Year on year: 4.6%  Median: $300,000 Darwin Month: -1.0% Quarter: 1.4%  Year on year: 1.7%  Median: $545,000 Canberra Month: -0.5% Quarter: 1.4%  Year on year: 1.7%  Median: $500,000 
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Capital gain no longer accelerating, slowdown will be welcomed by policy makers: RP Data’s latest statistics

<html><body>
Across Australia, including metro and regional, the August growth recorded was a flat lining 0.02%. However, the results of different cities varied substantially.
Here are the city and country results for median house price movements across the country over the month of August, as recorded by Residex.
CITY
 
MELBOURNE
2.31%
SYDNEY
1.52%
DARWIN
1.13%
HOBART
0.60%
ADELAIDE
-0.10%
ACT
-1.43%
BRISBANE
-1.70%
PERTH
-1.84%
Source: Residex
 
Turn over page for regional/country results.
<hr class="system-pagebreak">
COUNTRY
 
TASMANIA
0.59%
NEW SOUTH WALES
-0.15%
VICTORIA
-0.41%
QUEENSLAND
-0.51%
WESTERN AUSTRALIA
-0.52%
NORTHERN TERRITORY
-0.55%
SOUTH AUSTRALIA
-1.49%
Source: Residex
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August house price update: Which cities and regions grew the most?

<html><body>
Guest observation
Apart from loose monetary policies that lead to toxic lending, such as negative gearing, real estate investments by self-managed super funds (SMSF) and foreign investment, there is another factor behind rapid house price inflation.
Excessive increases in house prices are also caused by unreliable estimates of fair market value price.
To explain in more detail, real estate sales data has its flaws, due to settlement prices not being triggered from actual pre-sale valuations – which remain unchecked throughout the sale process.
What is a pre-sale valuation?   A pre-sale valuation is a comprehensive report put together by a registered valuer. It represents the market value of a property for sale (the price one is expected to get for their property and is subject to any supply and demand curve shifts during the validity period).
During this process, the valuer will look at the land value/ location/aspect, building structure/improvements and condition, building/structural faults, features of the home and recent sales in the area.   For land valuation only, valuers analyse sales of both vacant land and improved properties, making adjustments for the added value of improvements.
When there are unsuitable sales, a valuer will factor in other matters, such as most valuable use of the land, holding costs, taxation, constraints on use such as zoning and heritage restrictions, land size, shape and land features, such as slope and soil type, nearby development and infrastructure and views.
Ignoring the pre-sale valuation
Some results can be triggered from listing prices that may be inflated by matters irrelevant to the value of the property, such as marketing fees, commissions and profits. And yet, banks continue to lend to borrowers and produce flawed valuations to protect their financial position.
The system is obviously skewed towards market manipulation – which in turn has caused rapid increases in house prices and driven the house price values to levels that are economically unsustainable.   The flawed price model system is favoured heavily on the supply and demand side and through rampant speculation – instead of the property's true valuation price. This could easily be addressed by both investors and home buyers gaining access to a pre-sale valuation report (paid for by the seller and part of the contract) as a hedging instrument to minimise the impact of paying too much over the true value price.
This would mean sales data that is relevant and dependable, while dramatically improving bank lending performance.
However, an adjustment valuation for high risk loan to value ratio (LVR) lending, may still be required when the purchase price exceeds the initial valuation price. This would be a shorter version of the report in the sale contract to reflect the purchase price (the new market value price) and to verify that the purchase price was achieved through market demand, than from errors or omissions in the initial report.   As monetary policy makers look for ways to keep the housing market from overheating, it's critically important that the Reserve Bank and Australian Prudential Regulator Authority address the other systemic issues of price inflation.
One is the methodology used to estimate the selling price and the other concerns the reliability of sale price data, but chances of it happening are only likely if house prices come crashing down.
George Rousos is the founder and director of <a href="https://www.itc.nsw.edu.au/index" target="_blank">Industry Training Consultants.</a>  
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jrichardson-uRX5hFdKfN

The other factor behind our skyrocketing prices

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We know the rate of price growth continues to slow, but the most telling data in the latest November figures CoreLogic RP Data, was the slowing in growth for Sydney apartments.
Sydney continued to drive capital city growth in November, with house values up 14.3% on an annualised basis.
It was running at 14.9% two months ago. It was 15.2% during 2013.
But the apartment segment is nowhere near as strong.
Apartment values in November were up 8.7% over the past year.
But two months it was running at 11.5%. It was 11.6% during 2013.
It is fair to say most Australian cities have now passed their cyclical peak periods.
Sydney's house median sits at $825,000, up from $775,000 at the end of 2013.
Apartment median sits in Sydney at $605,000, up from $557,000 at the end of 2013.
Overall the national capital city average annualised growth for houses has been 8.9% compared to 5.9% for apartments.
Of course let's not forget that just three year ago units were the faster movers in 2012, which was overall pretty ordinary for growth with Sydney house prices up 1.3% annually and units up 2.3% annually.
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jchancellor-FAypfDUnLy

Sydney apartments the weaker link for late 2014 price growth: CoreLogic RP Data

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It seems when buying property in Victoria, the further you are from Melbourne, the cheaper it gets.
According to RP Data, there are 13 suburbs in Victoria that had median house prices under $100,000 over the last 12 months and they are all in the north and north-west parts of the state.
Victorian House Median Prices
<ol>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Sea Lake</a> - $70,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Kaniva</a> - $73,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Minyip </a>- $75,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Rainbow</a> - $77,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Ouyen</a> - $78,000</li>
<li>H<a href="https://www.urban.com.au/property-observer" target="_blank">opetoun</a> - $80,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Jeparit</a> - $82,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Nyah West</a> - $85,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Coleraine</a> - $88,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Dimboola </a>- $89,000</li>
</ol>
Similarly, the cheapest units are found 100s of kilometres from Victoria’s major metropolitan areas. But these units aren’t just in small rural towns. According to RP Data, some of Victoria’s cheapest units are found in the large rural hubs of Victoria, in places such as Horsham, Mildura and Moe.
Victorian Unit Median Prices
<ol>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Newborough </a>- $133,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Moe</a> - $145,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Morwell </a>- $149,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Mildura</a> - $159,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Alfredton</a> - $180,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Maryborough </a>- $182,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Wodonga </a>- $185,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Bairnsdale</a> - $188,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Horsham</a> - $188,000</li>
<li>
<a href="https://www.urban.com.au/property-observer" target="_blank">Yarrawonga</a> - $193,000</li>
</ol>
</body></html>

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