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Property Market Outlook

Property values dipped in the final quarter of 2011 however rising rents are pushing up yields for investors.

Research group RP Data say home values nationwide fell by 0.5% in the December 2011 quarter, bringing the fall in values for the year to 3.6%. Over the past 12 months, the unit market has enjoyed stronger performance with prices declining by 1.5% compared to 4.3% falls for houses.

During 2011 capital city house rents rose by 7.1% and unit rents were up by 4.2%, well and truly eclipsing growth in home values. The combination of falling values and rising rents has seen gross rental yields for houses improve from 4.0% at the end of 2010 to 4.4% for houses, and from 4.7% to 5.1% for units.

Annual change in combined capital city home values

Looking around the nation, Sydney home values were up by 0.4% in December, while home values across Melbourne fell by 0.5%. Melbourne's housing market was one of the weakest across the capital cities over the December 2011 quarter.

Brisbane home values fell by 0.6% in December 2010. Adelaide experienced a modest fall of 0.1% in values, and in Perth, home values recorded the largest monthly fall of all capital cities in December, down -1.6%.

Home values in Hobart fell by -2.7% in November, while in Darwin dwelling values fell by -0.3% in December. Even Canberra experienced a cooler market, with home values declining by 1.3% for December.

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