Australian Property Market (Alternate Data) – February 2010 Update

The Brisbane and Australian Eight Cities (Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart, Darwin & Canberra) House Price Index published by the Australian Bureau of Statistics (ABS) catalogue 6416.0 suits my requirement to track Australian house prices as part of my retirement investing strategy.  It however seems to have two flaws. Firstly the housing data is only published quarterly and secondly this housing data is then published over a month after the quarter ends.

I’m therefore using the next best set of data that I have been able to find to help me keep my finger on the pulse a little more as this data is published monthly. This house price data is published by RPData and in particular I will monitor the Brisbane and Logan City numbers as this is my likely area for retirement.

RPData provide what are called recent median house sale prices and using the latest data which is from January 2010 shown in the chart above it looks like big house price increases are still alive and well in Australia. Maybe that was one of the considerations used by the Reserve Bank of Australia (RBA) when deciding to increase interest rates by 0.25% this month.

The Brisbane Local Government area apparently increased in value by $22,000 this month rising from $520,000 to $542,000. The increase over the last year has been 13.5%. Who needs to go to work to add to the economy when you could leverage up by buying a few houses and then let asset price inflation make you rich [sic]. How this is sustainable I just don’t know.

$22,000 in one month is bad enough however I am currently earnings in pounds. With the current poor management of the UK over the last month my retirement house in Australia just became a lot smaller as the increase allowing for UK currency devaluation is £42,580. It gets even more depressing when I calculate that the year on year increase in pounds is 51.5%. That number is scarily big and just goes to show how bad asset price inflation is in Australia plus the damage that the UK Labour Party, Bankers and Bank of England combined are doing or have done to UK PLC.

In contrast Logan City has increased in value by $1,950 this month rising from $385,000 to $386,950. The increase over the last year has been 10.6%

In my current plans I have around 7 years more work until I can consider retirement. This will put me in my early forties. There is still therefore plenty of time for the exchange rates to recover through a government entering the UK, deciding to be prudent and putting the country back on track through good choices allowing the pound to recover. There’s also plenty of time for house prices in Australia to go back to sensible levels. For now I’ll keep my head down and keep saving/investing although today’s information is I must say is not overly motivating as my hard work is just not being rewarded.

As always DYOR.