Property Investment March 2011


Weekly Property Pulse Professional Edition

This week's edition covers:

Check out the new improvements to RP Professional

Industry Market Wrap
Quarterly Review December 2010
Article: Proportion of expensive sales climb sharply since the GFC
Commercial: Strong attendance at Bay Street auction
Research Blog: What's in store for Darwin?

Check out the new improvements to RP Professional
Thanks to the welcome feedback from our users, we’ve added new and improved features for our RP Professional Property System. Here are a few of the tools we’ve developed to help improve your property searching experience:

Improved reports
We’ve added more options to our Market Compare, Rental Comparison and Sales History reports, to help you make straightforward comparisons between properties. Get the information you want, clearly presented for easy analysis. You can also print your findings at the touch of a button, for when you want to share your search results without having to assemble a full report.

Improved Reports

CMA panel
It’s now easier than ever to generate a Comparative Market Analysis (CMA) Report from RP Professional. Just use this button on the front page to be taken straight to the report builder and generate the reports you want without having to navigate a series of menus first. We’ve also added new presentation options to the reports, allowing for even more customisation to your personal specifications.


Try RP Professional today and experience an easier, faster and smarter property system. There is no extra cost for RP Professsional.

Check out our help videos or attend an e-training session to learn more! Read our brochure for more information.

Industry Market Wrap
The RP Data-Rismark Home Value Index results for January 2011 are released next week. Due to the seasonally low volume of sales recorded during January, the results typically do not provide the greatest insight into the state of the market. Nevertheless, we anticipate that the results will be at best quite flat for the month following on from the December quarter where capital city values increased by just 0.4%.

On Tuesday next week the Reserve Bank will hold their March board meeting. The expectation is that official interest rates will remain on hold at 4.75%. The rhetoric coming out of the RBA during recent weeks suggests that the Bank believes interest rates are at an appropriate setting for the time being. As at the 22 February 2011 the interest rate futures market was not pricing in a further 25 basis point increase to official interest rates until February 2012. Importantly, most economists anticipate that the RBA will need to lift rates much earlier than this with some suggesting a rate hike is a possibility as early as May of this year.

The Australian Bureau of Statistics (ABS) released their quarterly Labour Price Index for December 2010 this week. During the quarter, labour prices increased by 1.0% after increasing by 1.1% during the previous quarter. Over the 12 months to December 2010 wages have increased by 3.9% which is the strongest annual growth since the 12 months to March 2009. The result shows that wages grew at a faster rate during the year than core inflation (2.7%). Considering that migration numbers have been cut to around 170,000 persons annually and that the unemployment rate is already sitting at 5.0% and expected to decline further, it appears that the cost of labour is set to increase further during the coming quarters. If wages continue to increase at or above their current rate it could lead to growing inflationary pressure. Given this, we expect that the RBA will keep a close eye on wage growth during the coming months and it will be an important consideration for their interest rate decisions.

Advertised Stock on the Market
Weekly listings
The number of new properties advertised for sale has increased sharply this week, up 8.9%. The number of new property advertisements is now 4.1% higher than at the same time last year and 12.9% higher than the 12 month average. With new advertisements increasing sharply, total advertisements have also increased over the last week, although at a much lower rate, up by 3.5%. Total property advertisements are 19.4% higher than they were at the same time last year and 11.4% higher than the 12 month average.

What's for sale in your area?  Where are the local hotspots?  Who's doing the selling?  For all these answers and more, click here or phone 1300 734 318 to get a free two-week trial of RP Data's On The Market®.

Latest National Auction Clearance Rates
Clearance RatesAcross the combined capital cities the weighted average auction clearance rate increased from 51.7% the previous week to 55.2% last week. Last week's clearance rate was the strongest across the combined capital cities since the week ending 24 October 2010. The volume of auctions taking place was also quite strong with more than 1,500 capital city auctions during the week. In Melbourne, auction clearance rates remained stable over the week at 59.7% and in Sydney clearance rates fell to 58.2% from 61.7% the previous week.

Keep track of your area's weekly changes in auction results with our Auction Results panel, found on the top right corner of the home page.

Number of Properties Advertised for Rent
Rental ListingsThe number of newly advertised properties for rent fell by -2.6% last week and new advertisements are at fairly similar levels to those recorded at the same time last year. Total rental advertisements also fell by -2.6% last week however, they are 2.3% higher than at the same time last year.

Quarterly Review December 2010
The December 2010 quarter has seen the slowdown within the residential property market continue at a time when Australian economic conditions are generally quite positive. Capital gains in the housing market have been virtually flat, having evaporated after 17 months of consistent capital gains between January 2009 and May 2010.

RP Data Quarterly Reviews are prepared by our dedicated Research team using the most accurate and up to date data to give our customers an exclusive analysis of changes in the property market.

Read the full review…

Article: Proportion of expensive sales climb sharply since the GFC

During the final quarter of 2008, capital city dwelling sales in excess of $500,000 accounted for around 28% of all sales, over the final quarter of 2010, 46% of all sales were at prices above $500,000.

Across the combined capital cities, there has been a surge in activity for more expensive properties since Australia began to rebound out of the Global Financial Crisis (GFC). During the final quarter of 2008, which was also the most recent low in capital city home values, 72.2% of all sales were at prices below $500,000. During the final quarter of 2010, only 54.4% of sales were at prices below $500,000.

Read the full article…

Commercial: Strong attendance at Bay Street auction
A fully leased retail property in Port Melbourne, Victoria, has been sold at auction on a tight yield by agents of Fitzroys.

 The property at 187 Bay
Street, Port Melbourne, was sold with a new lease in place to The Noodle Box at an auction attended by more than 100 people.The property at 187 Bay Street, Port Melbourne, was sold with a new lease in place to The Noodle Box at an auction attended by more than 100 people.

Fitzroys agents, Geoff and Charles Emmett, marketed the property, which achieved a final selling price of $1.555 million.

The new ten-year lease at a rate of approximately $60,000 per annum gave the sale a tight yield of approximately 3.87%.

According to the agents, the sale of the 85 sqm shop generated what is potentially the lowest strip retail passing yield recorded for strata premises in the past few years.

“The offering provided investors with the security of an exceptionally long lease to a highly-regarded national retailer with the opportunity to capture rental upside in year five of the lease via the mid-term market rent review,” said Mr Emmett.

Stay up-to-date with the latest commercial property news all in one place. Subscribe to the Australian Property Review, powered by RP Data for only $1.90 a week and receive a weekly newsletter that includes Auction Results, Deals of the Week, Retail News, Leasing Deals and an Industry Market Update. Click here to find out more information.

Research Blog: What's in store for Darwin?
Capital gains within the Darwin housing market have been outperforming the broader capital city average since early 2004. Over the last ten years the growth rate has averaged 12.7% per annum which is well above the combined capital city average of 9.2%. Over five years the average rate of growth is even higher at 13.0% per annum compared with the broader benchmark growth rate of 6.8% across the capitals.

Read the full article at…

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