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Easing for ABS house prices
Released 3 May 2011

The latest update for the Australian Bureau of Statistics index of established house prices shows a modest easing in early 2011, according to the Housing Industry Association (HIA).    

HIA’s Chief Economist Harley Dale said the ABS Index of Established House Prices eased by 1.7% in the March 2011 quarter to be effectively flat over the year – the price index was 0.2% lower compared to the March quarter of last year.

“The ABS existing house price series is subdued at present, consistent with the buyers’ market that has been in play for some time and with the on-going justification for interest rates to remain on hold.

“We continue to expect a flat to slightly weaker trajectory for existing house prices over the course of 2011, as is currently playing out, with a solid floor being provided by Australia’s strong underlying fundamentals for housing,” said Dale.

He said the updated resembled the 2.2% decline reported two years ago for the March 2009 quarter ABS update.

“Talk then of impending doom and gloom for Australian property prices proved wide of the mark and any repeat of such exaggerated claims following the ABS numbers will once again be well wide of the mark,” Dale said.

The ABS Price Index of Project Houses across Australia’s eight capital cities increased by a modest 0.8% in the March 2011 quarter to be up by 2.8% compared to the March quarter of last year. This is slower than the headline inflation rate which was up by 3.3% cent over the same period.

“Residential construction activity is weakening at present and now is a good time for people to contemplate building or renovating a home,” said Harley Dale.

The capital city project house price index increased in the March 2011 quarter by 1% in Sydney, 1.3% in Melbourne, 0.5% in Brisbane, 0.7% in Adelaide, 0.3% in Perth, 0.1% in Hobart, 0.4% in Darwin, and 0.8% in Canberra.