HERC Index

Source: Cape Cod Australia www.capecod.com.au

March 2015

Home Extension & Renovation Cost Index

This month, we are pleased to present a comparison of two other notable pricing measures alongside the HERC Index: CPI (Consumer Price Index) and RPPI (Residential Property Price Index – in this case, Sydney-based).

Highlights to note on the relative movement of each measure between 2013-2015:

  • Increases in home extension and renovation costs have, on average over the 3 years, outpaced CPI (10.61% total increase versus 7.36%).
  • In percentage terms, residential property prices increased only marginally more than CPI in 2013, however increased at a rate of five to six times CPI in the two years thereafter – leading to a 34.48% total increase in Sydney residential property prices over the three years*, versus 7.36% increases in CPI.
  • Residential property prices have also grown at a significantly greater rate than home extension and renovations costs (34.48% total increase versus 10.61%).

These figures may provide some explanation for the increasing number of Sydneysiders planning on performing renovations and extensions within the next 12 months – we look forward to presenting data on this trend with next month’s HERC Index update.

(Note: There was no change to HERC Index figures for March).

HERC Index vs CPI vs RPPI

CPI: 12 months to 31 March (Sydney)

2013

2.80%

2014

2.80%

2015

1.60%

 

Residential Property Price Index (Sydney): 12 months to 31 March*

2013

3.60%

2014

15.70%

2015

12.20%*

 

HERC Index: 12 months to 31 March

2013

4.26%

2014

2.55%

2015

3.46%

 

References:

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