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Promising home value figures mark an end to 2011
Released 1 February 2012

Australia’s capital city home values in December declined by the smallest amount for 2011, according to preliminary RP Data-Rismark Home Value Index.     

RP Data’s Director of Research Tim Lawless said the capital city home values fell by -1.5 per cent in the March quarter and by a further -0.8 per cent in each of the June and September quarters.

“This rate of decline had decelerated to -0.5% by the final quarter of 2011,” Lawless said.

In 2011, Australian capital city dwelling values experienced a capital loss of about three and a half per cent. Regional house values fared a little better, correcting by around three per cent. This compared to the 14-15 per cent decline in Australian shares. Adding in rents, the gross total return to Australian property investors was slightly less than one per cent over 2011.

Lawless said rental markets continued to strengthen in December.

“Weekly rents across the capital cities were up 1.0 per cent over the December quarter and are now 6.3 per cent higher than at the same time last year.”

“These higher rental rates combined with the slide in property values have improved investors’ yields.

"The average capital city dwelling is now offering a gross rental return of 4.6 per cent after a consistent trend upwards since mid-2010 when the typical capital city dwelling was yielding just 4.1 per cent.

"Darwin and Canberra are the highest yielding locations for property investors while Hobart, Brisbane, and Sydney provide gross yields that are better than average,” Lawless said.

The RP Data-Rismark ‘rest-of-state’ index, which covers Australia’s regional markets, has also revised up in November from +0.3 per cent to +0.5 per cent. This is the most significant increase in regional house values since November 2010.