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Dwelling values across capital cities recorded a second month of capital gains in July with dwelling values up by 0.6% over the month following a 1.0% rise in June.

The RP Data-Rismark Home Value indices posted a second successive rise in capital city dwelling values over the month of July. Across the combined capital cities, dwelling values rose by 0.6 per cent over the month with the rises being relatively consistently over the first three weeks of July followed by a -0.2 per cent fall over the final week of the month.

Over the three months to the end of July, capital city dwellings have posted an increase of 0.2 per cent.

Dwelling values across the combined capital cities are now down only -0.6 per cent since the start of this year representing a rebound relative to this year's low point on 30 May when values were 2.2 per cent below the calendar year starting level.

According to RP Data's research director Tim Lawless, the July results were heavily influenced by improving values across the most expensive capital city markets.

"The July rise was not as broad-based as the June results, with the month-on-month increase primarily being associated with the Sydney and Melbourne markets where dwelling values rose 1.2 per cent and 1.4 per cent respectively. The July result, when viewed together with the positive June result, suggests housing markets may be starting to respond to lower mortgage rates, which according to the RBA's latest Board meeting minutes are around 50 basis points below their 15-year average."

Rismark CEO Ben Skilbeck, added, "Among the capital cities there remains significant differences in performance. While both Sydney and Melbourne experienced gains over the month, Adelaide declined -2.5 per cent. On a year to date basis, Sydney values have risen 1.7 per cent while at the other end of the spectrum, Melbourne and Adelaide have experienced declines of -2.7 per cent".

According to Tim Lawless, at the combined capital city level the July rise was fairly evenly dispersed between houses and units.

"House values were up by 0.6 per cent over the month while unit values rose 0.7 per cent. Over the last 12 months it is clear that unit values have been the most resilient to value falls with the Home Value Index showing -1.6 per cent fall in unit values compared with a -2.6 per cent fall in house values."

Rental rates are continuing to rise; across the capital cities weekly rents have risen by 3.3 per cent over the first seven months of the year. Increases in weekly rents have been recorded across all capital cities over the last seven months apart from Hobart and Adelaide. The largest rises in weekly rents over the year to date can be found in Perth (13.7%) and Darwin (5.4%).

According to Mr Lawless, other indicators are also showing some further signs of improving conditions in the market. "Auction clearance rates were recorded at 56.6 per cent over the last week of July, the highest clearance rate since February last year. We are also seeing average selling time and vendor discounting both at healthier levels than what was recorded a year ago and effective supply levels have also seen some improvement from their highs of late last year."

Media enquiries contact:

RP Data: Mitch Koper, corporate communications manager on 0417 771 778 or mitch.koper@rpdata.com

Rismark: Ben Skilbeck, Managing Director, on 0403 138 172 bs@rismark.com.au

Introduction to the RP Data-Rismark Daily Hedonic Home Value Index methodology:

The RP Data-Rismark Hedonic Home Value Index is calculated using a hedonic regression methodology that addresses the issue of compositional bias associated with median price and other measures. In simple terms, the index is calculated using recent sales data combined with information about the attributes of individual properties such as the number of bedrooms and bathrooms, land area and geographical context of the dwelling. By separating each property comprising the index into its various formational and locational attributes, differing observed sales values for each property can be separated into those associated with varying attributes and those resulting from changes in the underlying residential property market. Also, by understanding the value associated with each attribute of a given property, this methodology can be used to estimate the value of dwellings with known characteristics for which there is no recent sales price by observing the characteristics and sales prices of other dwellings which have recently transacted. It then follows that changes in the market value of the stock of residential property comprising an index can be accurately tracked through time. RP Data owns and maintains Australia's largest property related database in Australia which includes transaction data for every home sale within every state and territory. RP Data augments this data with recent sales advice from real estate industry professionals, listings information and attribute data collected from a variety of sources. For detailed methodological information please visit www.rpdata.com