[zaph]

Quote

HOUSE prices have risen nationally for the first time in more than a year, dragged up by a stronger than expected result in the Melbourne market, a new report has found.

Australian Property Monitors' latest house price report shows that the national median house price rose marginally in the December quarter from $533,521 to $533,650, while units slid backwards by 0.5 per cent.

This was the first sign of growth after five consecutive quarterly falls and was led by Melbourne house prices, which recorded the highest median growth at 1.1 per cent, followed by Hobart and Adelaide (both 0.5 per cent). Sydney's median remained exactly the same at $636,822, still the highest of all capital cities. First home buyers eager to beat the end-of-year deadline on stamp duty exemptions kept prices stable.

APM's senior economist, Andrew Wilson, said the strong growth in house prices in Melbourne was almost exclusively due to large rises at the prestige end.

House prices in the rest of the city were flat or falling.

Overall Dr Wilson described the national housing market as still ''patchy and anaemic'', something that could change if interest rates continued to fall.

http://theage.domain...0124-1qfrm.html

This post has been edited by zaph: 24 January 2012 - 08:19 PM

[Peachy]

2 comments/questions:
- does Dr Willo really believe that rises in the top end of the market can affect the median, or is he having a covert spruik for expensive properties?
- would a $129 rounding-error-on-a-fly's-fart downward change in the median create a headline about falling prices, or would they call it a flat/stable/steady/resilient market?

[zaph]

Peachy, on 24 January 2012 - 08:31 PM, said:

2 comments/questions:
- does Dr Willo really believe that rises in the top end of the market can affect the median, or is he having a covert spruik for expensive properties?
- would a $129 rounding-error-on-a-fly's-fart downward change in the median create a headline about falling prices, or would they call it a flat/stable/steady/resilient market?

or why only cities that went up are mentioned.
or how Sydney's median managed to remain exactly the same, not one dollar's difference.

[firehawk]

zaph said:

or why only cities that went up are mentioned.
or how Sydney's median managed to remain exactly the same, not one dollar's difference.

Highly suspicious. There must have been some impressive number ... erm ... massaging ... to achieve that result.

[booboo]

APM and Fairfax have been out in force spruiking their results in the last week. Firstly there was this from Stephen Nicolls, all about anecdotal evidence:

Quote

Strong January sales point to housing rebound

Stephen Nicholls
January 21, 2012HOME buyers in Sydney's east and inner west are out in force, with agents reporting a surprising number of early sales.

Traditionally January is a quiet month for sales, but some believe the two interest rate cuts in November and December could be encouraging buyers.

Along with many of last year's unsold properties finding buyers, there have been cases of freshly listed homes selling within a week. ''We have rarely seen so many truly qualified and cashed-up buyers,'' said Di Jones director Gary Sands.

His agency has recorded six sales this year already, with several pending. Among the sales was a three-bedroom semi in Henrietta Street, Waverley, that was listed on January 4 and sold a week later for $1 million.

The others ranged from a two-bedroom apartment with parking in Bondi for $670,000 through to a $1.75 million unit at the Advanx development in Rushcutters Bay.

Bresic Whitney principal Shannan Whitney said lower interest rates could be working their magic. ''We've moved 10 properties this year that we couldn't sell last year, which is encouraging,'' Mr Whitney said. ''I definitely think the lower interest rates have helped and now many expect they could even go down further.

''The European situation is still weighing on people's minds, but there's a little bit more optimism since the last quarter of last year.''

The senior economist with the Fairfax-owned Australian Property Monitors, Andrew Wilson, said there was always a lag of a couple of months before the market improved after a rate cut.

''Housing affordability is at its best level for a while, with most prices flat over 2011 and interest rates down,'' Dr Wilson said. ''So there is a sense of renewed optimism and confidence in the NSW economy, despite some fairly ordinary unemployment numbers this week.''

How the hell housing affordability caused by "flat" house prices and fallinginterest rates results in "renewed optimism and confidence in the NSW economy", whilst a large spike in unemployment does not do the opposite, I'll never know. Of course, Dr Ando also ignored the drop in sentiment from NSW from consumer and business surveys, but hey, we all know that housing is all that matters, right? Dr Ando really does talk a lot of garbage around non-sequitors.

Of course, Fairfax then needed another article (other than the one in the OP) to talk up APM's results:

Quote

Housing prices on the rise ... but hardly raise the roof

Simon Johanson
January 25, 2012
MEDIAN house prices rose slightly around the country in the December quarter for the first time since late 2010, according to data from Australian Property Monitors.

But it is too early to tell whether the housing downturn has been halted.

Prices were steady or rose during the quarter in the country's two biggest housing markets, Sydney and Melbourne, with the southern capital's prices up 1.1 per cent from the previous quarter, APM said.

The report shows that the national median house price rose from $533,521 to $533,650 in the December quarter, while units slid backwards by 0.5 per cent.

Values in all other capital cities, apart from Adelaide and Hobart, fell.

''The small growth in the national median house prices was due to an increase in buyer activity in the bottom end of the market in Sydney and, by contrast, in the top end of the market in Melbourne,'' said APM senior economist Andrew Wilson.

''Looking forward, 2012 will provide mixed outcomes for housing markets, with some capital cities set to revive while others will remain flat.''

Stockdale & Leggo chief executive Peter Thomas said property listings were down this year but consumers had become more confident since the Reserve Bank's interest rate cuts.

The likelihood of further rate decreases would help vendors, he said.

The year-end boost followed a 12-month rout during which house prices declined year on year in all Australian capitals, with Brisbane down 7.5 per cent, APM's figures show.

Even in Sydney, the country's most resilient housing market, prices fell during the year by 1.3 per cent. Melbourne's median dropped 3.1 per cent, Canberra's 3.5 per cent and Perth's 5.2 per cent.

But HSBC Bank chief economist Paul Bloxham said we were more likely to see a levelling out of prices or even small gains this year.

''We should start to see stabilisation in the housing market as a result of the RBA interest rate cuts,'' he said.

APM is owned by Fairfax Media, which owns The Age.

How Dr Ando can get away with continually saying that there was a rise in the lower end of Sydney / NSW due to the expiring stamp duty exemption for FHBs without then saying there will be a corresponding drop due to the FHBs brought forward I will never know. Good thing that the comments on the above article aren't quite so fooled.

Incidentally, this these articles are spruiking about a $129, yes, $129, rise in the median house price. This equated to a massive rise of 0.024% for houses. What about units? Oh, they fell 0.5%, but don't worry about them, because houses went up 0.024%! (Which, as one commentor smartly noted, will likely be revised down anyway, and as another noted, it's no doubt well within the noise margin.)

It shows just how one-sided Fairfax is with reports on housing.

[booboo]

Incidentally, I would love to get my hands on APM's real release to watch their values and revisions, if anyone has access or knows where to get it.

The following bit got me really curious:

Quote

Even in Sydney, the country's most resilient housing market, prices fell during the year by 1.3 per cent. Melbourne's median dropped 3.1 per cent, Canberra's 3.5 per cent and Perth's 5.2 per cent.

Funny about the Sydney drop, because I could've sworn Dr Ando claiming in several different articles late last year that Sydney only dropped around -0.4% in the first three quarters of 2011 (which he calls "flat"). Then, the last quarter the median price is unchange (by not even $1, apparently), and for Sydney it becomes a -1.3% drop.

For some reason APM figures contintually quoted in articles don't instill a lot of confidence in me.

[booboo]

And to complete my triumvirate of posts: by the sounds of what Dr Ando said, the rise in Melbourne house prices is a compositional bias, due to more transactions in high-end Melbourne property. From what other quotes were sourced, it appeared that rather than real price gains, it came from vendors being "more realistic". This would explain why RP Data's hedonic index didn't reflect any such rise.

[zaph]

booboo, on 25 January 2012 - 12:48 AM, said:

And to complete my triumvirate of posts: by the sounds of what Dr Ando said, the rise in Melbourne house prices is a compositional bias, due to more transactions in high-end Melbourne property. From what other quotes were sourced, it appeared that rather than real price gains, it came from vendors being "more realistic". This would explain why RP Data's hedonic index didn't reflect any such rise.

APM is stratified, so there shouldn't be compositional bias. i used to doubt APM. this months sydney results make me want to use the reports as toilet paper.

[booboo]

Wow, I am starting to talk to myself. Anyway, how about that "information" from APM?

(All bolding below is mine.)

Let's start here, on the 15th Jan:

Quote

Despite all these headwinds, the Sydney housing market stood firm last year. AustralianProperty Monitors' data show the median house price in Sydney for the year to November 2011 was only 1.5 per cent less than the year ending November 2010. The unit market was particularly resilient, with the median price rising by 1.1 per cent in the same period. Sydney was clearly the best performer of all the capital cities last year.

Now here on the 7th Jan:

Quote

The best capital city performers were Melbourne and Sydney, where annual median house prices rose by 1%.

Quote

The unit market clearly outperformed the housing market over the year to October 2011, with Sydney recording median unit price growth of 2% followed by Melbourne and Darwin up by 1%.

Uh-huh. Sure, the time frames are slightly different, but not enough to explain the difference in values.

Now, some values? Let's start here, on the 5th Jan:

Quote

Research from Australian Property Monitors shows prices in Sydney were relatively stable during 2011. Houses recorded a median price of $634,326 in October and units $450,775.

And here is seems that Sydney had a large fall in the October quarter:

Quote

Recent house price data confirms a subdued housing market overall for Sydney. According to Australian Property Monitors, the median Sydney house price fell 1.1 per cent over the October quarter, and unit prices fell 0.9 per cent. Over the year ending October, median house prices have fallen by 2.3 per cent, but unit prices have risen 0.5 per cent over the year.

A quick bite at Dr Ando being wrong here on the 2nd Nov:

Quote

"Now there's no reason why [the property market] would go backwards," Dr Wilson said. "It might just push things upwards, rather than flat."

No reason? Really? The really funny thing about these old articles linked to by APM is you can see all of Dr Ando's completely wrong predictions.

Apparently there were significant falls in the September quarter as well:

Quote

Sydney's values dipped 1.8 per cent, Brisbane was down 2.7 per cent, Canberra fell 1.4 per cent, while Perth and Adelaide fell by 1.6 and 2 per cent respectively. Melbourne's values fell least, by 0.9 per cent, according to APM's figures.

And in the year to August, they were only down a little, published on the 8th October:

Quote

As expected, Sydney has led the nation for most of the year as the most resilient and stable capital city for house prices. This performance is continuing, according to the latest Australian Property Monitors data, with Sydney median house prices down just 0.6 per cent during the year to August. Apartments performed even better, with prices unchanged despite a relatively quiet period of activity.

However, for the August quarter, things weren't so bright, published on the 26th Sept:

Quote

Despite the consolidation in buyer activity, the latest Australian Property Monitors data shows that Sydney's median house price for the three months to August fell by 1.8 per cent to $643,315, compared with the previous quarter. The median price for units also fell by 1.8 per cent, to $448,024.

No wonder Dr Ando then cherry picked a different date for the falls two weeks later.

Also, in August the median values of $643,315 for houses and $448,024 for units dropped/rose to $634,326 and $450,775 respectively by end of October - fall of 1.14% and rise of 0.61% respectively.

[booboo]

(I had to split the post because of the limit on quotes.)

Earlier on the 5th September, we got more figures:

Quote

Latest Australian Property Monitors data showed Sydney's July quarter median house price was $639,484, significantly higher than that recorded by the other capitals.

...

Despite Sydney being Australia's most expensive city for houses, its prices have dropped the least. Although Australian housing markets have been subdued so far in 2011 as a consequence of reduced buyer activity Sydney's median house price has fallen by just 0.6 per cent over the year to July 2011 which is clearly the best result of all the major capitals.

A digression for some humourous spruiking of the top end from Dr Ando on the 6th August:

Quote

A senior economist at APM, Andrew Wilson, said some streets at the upper end were "immune" because buyers in that market were generally resilient to what was happening in the economy.

"The epicentre of the hyperprestige market is the eastern suburbs," Dr Wilson said. "It's street based, it's moved from the cachet of the suburb to the cachet of the street." He said while most of the housing market had been subdued, the very top level "doesn't look subdued to me, it still looks like it's ticking along".

Which, of course, turned out to be incorrect.

Back in the June quarter, Sydney showed a 0.1% rise:

Quote

HOUSE prices continued to stagnate or deflate across the country in the June quarter, with only Sydney's housing market showing signs of life. Data from the Fairfax Media owned Australian Property Monitors for the three months to June show Sydney escaped a national downturn in median house prices of 0.6 per cent, recording instead a slim rise of 0.1 per cent.

No mention if it is houses or units.

May and June apparently were rising:

Quote

LATEST data indicates that Sydney continues to offer reasonable prospects for growth in housing market activity in 2011. Australian Property Monitors reported that Sydney's median house price rose by 1.1 per cent over the May quarter. This was the same increase in median house prices as APM recorded over the April quarter, and indicates some stability and perhaps Growing confidence in the marketplace.

So we went from a 1.1% rise in the April quarter, 1.1% rise in the May quarter, 0.1% rise in the June quarter to steady falls for the rest of the year, apart from December when it was flat. And during that entire time Dr Ando was upbeat and kept telling us to "expect" "modest" growth in everything from prices to buyer activity. Amazing when faced by his own data contradicting his own words. Just goes to show you shouldn't let facts get in the way of talking up the market.

And April and May quarters were apparently the only times Sydney showed growth:

Quote

The latest Australian Property Monitors research has revealed that Sydney house prices rose 1.1 per cent over the April quarter. This followed a fall in house prices of 0.6 per cent over the March quarter.

The biggest contributor to the April rise in house prices came from the top 25 per cent of the market, which increased by 5 per cent. The upper-middle price sectors rose by 1.7 per cent while the bottom 50 per cent of the market recorded no rise in median house prices over the April quarter.

Sydney median house price growth will continue to be driven by the influence of the underlying housing market fundamentals.

I included the last paragraph for kicks at how wrong Dr Ando frequently is.

That's about as far back as the regular Dr Ando sourced articles go.

By the way, the lack of transparency on APM figures is less than inspiring. Is it SA or raw? Revisions? And these guys are free to spruik loud and clear about property - if it were shares, they'd have been cobbled by ASIC by now. By the way Dr Ando's articles and quotes often go you'd think we'd been seeing steady rises for the last year.

[booboo]

zaph, on 25 January 2012 - 01:35 AM, said:

APM is stratified, so there shouldn't be compositional bias. i used to doubt APM. this months sydney results make me want to use the reports as toilet paper.

Stratification just lessons the compositional bias by grouping the samples in homogenous (or somewhat homogenous) groups, it doesn't remove it. Within the groups there can still be compositional bias.

[booboo]

http://en.wikipedia....tified_sampling

Wikipedia introduction is not too bad. The homogenous groups used by APM would probably be by locale, maybe, or even price groups within the locale. Who knows - I am a little curious, but somewhat dubious on how their groups were chosen.

[tom]

booboo, on 25 January 2012 - 02:30 AM, said:

Wow, I am starting to talk to myself.

You might be talking to yourself but I know myself and others are listening!

[zaph]

booboo, on 25 January 2012 - 06:44 AM, said:

http://en.wikipedia....tified_sampling

Wikipedia introduction is not too bad. The homogenous groups used by APM would probably be by locale, maybe, or even price groups within the locale. Who knows - I am a little curious, but somewhat dubious on how their groups were chosen.

i couldn't care less any more. after the Sydney median result being exactly the same they have zero credibility. the only way a median adjusted for composition could come out with exactly the same figure is if it was rounded to the nearest 1000 or whatever, which it clearly isn't.

[cobran20]

booboo, on 25 January 2012 - 02:30 AM, said:

Wow, I am starting to talk to myself.

You're never alone with schizophrenia!

[staringclown]

booboo, on 25 January 2012 - 02:30 AM, said:

Wow, I am starting to talk to myself.

'Tis the preserve of the wise man to shout into the wind, unanswered.

[booboo]

zaph, on 25 January 2012 - 06:56 AM, said:

i couldn't care less any more. after the Sydney median result being exactly the same they have zero credibility. the only way a median adjusted for composition could come out with exactly the same figure is if it was rounded to the nearest 1000 or whatever, which it clearly isn't.

Yeah, have to agree there. Seems just too unlikely to be correct.

[booboo]

Well...APM certainly like to put some nice twists on their numbers by clever use of revisions, it seems.

http://www.macrobusi...ports-own-data/

Nice pickup by UE.

[zaph]

booboo, on 27 January 2012 - 05:07 AM, said:

Well...APM certainly like to put some nice twists on their numbers by clever use of revisions, it seems.

http://www.macrobusi...ports-own-data/

Nice pickup by UE.

you would expect anyone to use revised data if it is available. however, APM should be explicit in their press releases that the data has been revised, like the ABS do. Journo's should also pay more attention to revisions.

[staringclown]

zaph, on 27 January 2012 - 06:33 AM, said:

you would expect anyone to use revised data if it is available. however, APM should be explicit in their press releases that the data has been revised, like the ABS do. Journo's should also pay more attention to revisions.

I'm sure they'll publish a retraction when the revised December Qtr figures come out.