RP Data – Rismark Property Value Index Release

Released 30 May 2008

For expanded Media Release click here to view the PDF document

Market softens creating strong buying opportunities

The RP Data/Rismark International end of month indices report released today confirmed that capital growth in the key
markets of Sydney and Melbourne has flattened considerably during 2008.

According to Rismark International’s Head of Research, Dr Mathew Hardman, we are now seeing a higher level of
volatility enter the housing market from quarter to quarter. Overall, we are entering a period of higher volatility across
all asset classes: stocks, property, interest rates, metals.”

He said the recent fluctuations in the capital growth rates, (where growth rates move from positive to negative
and back again) indicates the likelihood of large falls in the market has decreased. However this is conditional on a
stable interest rate environment which is likely to result in a static rate of growth.

Commenting on the Outer Sydney markets which have been hardest hit with price falls, Dr Hardman said, “Areas in the West
and South West of Sydney have fallen 20% since 2003, but the decline has been consistent over a significant period, as
distinct from flat periods punctuated by abrupt falls. The recent return of volatility indicates this pattern may be coming to
an end.”

RP Data’s Research Director, TimLawless, is confident that the supply sideimbalance in the nationalhousing market will see
further property value increases over the next five years. “We expect low levels of housing supply to continue placing
upwards pressure on housing prices over the long term. However in the short to medium term, demand side constraints
are acting to slow the market. Most importantly, the current high inflationary environment is causing a high degree of
uncertainty in the market which translates to low buyer and investor confidence.”

“Cashed up buyers now have a large amount of leverage as a result of current market conditions especially now that
properties are taking longer to sell and there are fewer buyers,” Mr Lawless said. “The best immediate opportunities can be
found in Adelaide, Brisbane and Darwin, not to mention many of Queensland’s regional areas.”

The figures released today in the RP Data/Rismark International end of month Property Value Indices Report show that
during the first four months of 2008 Australian property values have shown a minor decrease of 0.03 per cent. The median
value of an Australian dwelling is now $461,384, which is 8.2 percent higher than April last year.

“Compared to Australian shares, the property market still appears to provide a sound diversification option. By comparison
the ASX/S&P 200 index has fallen by 11.7% during the first four months of 2008,” Dr Hardman said.

Around the Nation
Adelaide continues to lead the nation in terms of capital growth with house and unit values increasing by 21.04 percent and
25.28 percent respectively. Despite the ongoing gains in property values, Adelaide houses still provide the most affordable
price tag of any mainland capital city. The median value of a house in Adelaide is now $421,478, approximately $73,000
higher than the same period last year. Strong price growth is still apparent across all regions of Adelaide; however the
mortgage belt regions of the outer northern and southern suburbs are now showing comparatively lower rates of growth
than the more affluent inner and coastal suburbs.

Brisbane is also continuing to show solid growth in property values with overall growth of around 3 percent for houses and
units during the first four months of 2008. The value gap between Brisbane and Melbourne is becoming wider as growth in
the Melbourne market has slowed considerably. At the start of 2007 house values in the two cities were virtually on par,
however the stronger value growth in the Brisbane market has seen Brisbane house values g g now 5 percent or $24,000 higher
thanMelbourne’s.

Canberra has provided a solid return over the last year with an increase in property values of 13.5 percent over the year.
The first quarter of 2008 has seen value growth flatten with Canberra dwelling values decreasing by half a percentage point.
Price falls in some outer regions are being balanced by value improvements within the inner suburbs. This trend is leading
to increasingly volatile statistics in the Canberra marketplace.

Melbourne’s overall growth rate has slowed considerably during 2008 with the first four months recording a fall in property
values of 0.16 percent. A further disparity in the performance of Melbourne regions is emerging with the more affluent
inner areas such as Moreland and Boroondara returning growth between 2 and 4 percent. At the other end of the spectrum
is Hume City where values have fallen by 5 percent during 2008.

Darwin continues to record a solid performance with a 10 percent gain in dwelling values over the twelve months to April
‘08. The Darwin market has continued to record an impressive rate of growth during the first four months of 2008 with
values increasing by 4 to 5 percent. Despite such strong growth in dwelling values, Darwin continues to record the highest
gross rental yields in the nation. Rental houses are returning an average gross rental yield of 5.7 percent while units are
returning an average gross rental yield of 6.2 percent.

Sydney value growth is flattening across the board, even in the traditional growth hotspots of the inner city and metrocoastal
regions. Six to twelve months ago we were seeing steady growth of 2 to 4 percent in the Eastern Suburbs, North
Shore and Northern Beaches. 2008 has been more volatile, with a month of growth followed by a month of decline;
virtually a flat market. The exception to the rule seems to be the St George – Sutherland region where value growth has
been much steadier. The best performing market during 2008 has been units in South Western Sydney where buyers are
opting for units and town homes instead of more expensive houses.

Perth remains as the only capital city to experience a decline during the twelve month period to April 2008, with dwelling
values falling by 1.33 percent. The median value of a Perth house is now slightly less than $500,000. The inner city unit
market appears to be the safest haven in thisdeclining market. Perthunits values havedecreased by 1.35 percent over the
first four months of 2008, however the inner areas of Perth have defied the slow down.

 

NOTE:

*RP Data and Rismark recommends that caution be used when interpreting property indices results as these results can
vary depending on the methodology used and sample size.

In all RP Data and Rismark published indices, methodology is clearly indicated. More information on the RP Data‐Rismark indices can be found here: http://www.rpdata.net.au/indices/

For media enquiries contact:

Mitch Koper, National Communications Manager, RP Data Limited – 0417 771 778 or mitch.koper@rpdata.com