Australian capital city home prices have risen more than five per cent in the past year, with the Sydney and Perth property markets leading the charge.
Home prices across the eight state and territory capitals rose 5.3 per cent in the 12 months to August, according to the closely-watched RP Data-Rismark Home Value Index.
Perth experienced the biggest increase during the year, with home prices up more than nine per cent, while Sydney's were up seven per cent.
Hobart fared the worst, with prices down 1.1 per cent over the year.
Sydney was the strongest performer during the past three months, with prices up 5.4 per cent in that period.
RP Data research director Tim Lawless said the rate of increase in prices slowed to 0.5 per cent nationally in August.
"The half-a-per-cent gain over the month of August is a much more sustainable rate of growth and will be a welcome turn of events for policy makers," he said.
Rismark chief executive Ben Skilbeck said investors, rather than owner-occupiers, were likely to drive most of the growth in home prices during the coming months as they took advantage of low interest rates and solid returns.
"While the owner-occupier segment of the market is more than twice the size of the investor segment, there continues to be a number of indicators suggesting that this spring investors will be punching above their weight," he said.
Brisbane has posted the biggest increase in house prices of any Australian capital city, with a rise of 1.5 per cent in August.
The latest RP Data-Rismark home value index shows Brisbane's median house price has grown by 4.8 per cent in the past year to $429,000.
But the overall pace of growth in Australia's eight capital cities has slowed to 0.5 per cent, down from 1.6 per cent in July and 1.9 per cent in June.
The median capital-city house price is now $490,000.
RP Data research director Tim Lawless says the result shows prices are growing at a more sustainable level than in the past.
"I think what we're seeing in August is a seasonally weak month," he said.
"We are expecting in the Spring season that there will be quite a strong market for Australian properties."
Median house price rises in August
Sydney: up 0.6 per cent to $587,000. Melbourne: up 0.2 per cent to $507,000. Brisbane: up 1.5 per cent to $429,000. Adelaide: up 0.7 per cent to $380,000. Perth: down 0.2 per cent to $499,500. Hobart: down 1.9 per cent to $289,000. Darwin: up 0.7 per cent to $495,000. Canberra: up 0.9 per cent to $503,000. Average: up 0.5 per cent to $490,000.
Mr Lawless says the number of investors entering the property market continues to grow.
"The number of finance commitments for investors is up about 20 per cent on the past year," he said.
"There has been a small increase in the number of first home buyers, but they still only make up 14 per cent to 15 per cent of the entire market. So we are seeing market conditions now being led by investors, secondly by up-graders, with first-home buyers still being a relatively small portion of overall activity."
The increase in prices came in the same month as the Reserve Bank of Australia cut the official interest rate to a record low of 2.5 per cent.
All of the major lenders lowered the interest they charge variable-rate mortgages in August, making borrowing cheaper than it has been in years.
Perth prices drop, values in Sydney remain highest
The value of homes in Perth fell by 0.2 per cent in August, but is 9.4 per cent higher than during the same month last year.
Its median house price is now $499,500.
Sydney continues to have the highest median house price in the country, growing by 7 per cent in the past year to $587,000.
Hobart is the only capital city to see a year-on-year decline.
The Tasmanian capital's median house price is now 1.1 per cent lower than a year ago, at $289,000.
Sydney's property market heads into spring in the best shape in years, with RP Data releasing figures on Monday showing 5.4 per cent growth in the past three months.
Another sign of strength in the Sydney market was the sell-out of the first 159 apartments at Barangaroo at Saturday's early morning launch.
Even the four-bedroom penthouse sold, which was bought by an Australian expat living in Geneva for $10.5 million.
The total value of apartment sales at Barangaroo on Saturday exceeded $300 million.
RP Data said that Sydney was the best performing city in Australia. It is also the most expensive, with the analyst's figures showing a median dwelling value (houses and apartments combined) of $587,000.
RP Data said Sydney home values have now grown 7 per cent in the past year. The city is now set to record growth of about 10 per cent for the year.
The RP Data announcement follows a weekend which saw Sydney record a weekend auction clearance rate of 84 per cent, which was the highest of the year and one of the highest clearance rates ever recorded for Sydney.
The strong result came despite there being 545 auctions scheduled, which made it the second-biggest auction day of the year. Listings were up by about 200 on the same weekend last year, partly due to next week's election encouraging sellers to bring their auctions forward.
"Buyers continue to pounce on properties at auction with Saturday's super result being achieved despite a surge in auction listings," the senior economist at Australian Property Monitors, Dr Andrew Wilson, said.
House values finally back on the rise Link THERE was good news for home owners in Brisbane on Monday - across most of the country in fact - with a report from RP Data and Rismark International showing that the values of dwellings in our capital cities are on the rise.
Overall gains were recorded at 0.5% in August slowing down somewhat from capital gains of 1.6% in July and 1.9% in June, but an indication nevertheless that our economy is slowly righting itself. Prices were up 5.3% on August last year with a median value of $490,000.
Brisbane, a city which until now has been struggling to take any firm steps towards growth, was the best performer in August with a 1.5% turnaround.
Home prices in Sydney rose by 0.6%, Melbourne by 0.2% with Perth still boasting the fastest growth of 9.4% despite a dip of 0.2% this month.
According to Tim Lawless, the research director at RP Data the increase in prices is down to the combination of low mortgage interest rates and a smaller number of homes on the market than a year ago.
Any expressed market opinion is my own and is not to be taken as financial advice
House values finally back on the rise Link THERE was good news for home owners in Brisbane on Monday - across most of the country in fact - with a report from RP Data and Rismark International showing that the values of dwellings in our capital cities are on the rise.
Overall gains were recorded at 0.5% in August slowing down somewhat from capital gains of 1.6% in July and 1.9% in June, but an indication nevertheless that our economy is slowly righting itself. Prices were up 5.3% on August last year with a median value of $490,000.
Brisbane, a city which until now has been struggling to take any firm steps towards growth, was the best performer in August with a 1.5% turnaround.
Home prices in Sydney rose by 0.6%, Melbourne by 0.2% with Perth still boasting the fastest growth of 9.4% despite a dip of 0.2% this month.
According to Tim Lawless, the research director at RP Data the increase in prices is down to the combination of low mortgage interest rates and a smaller number of homes on the market than a year ago.
Peter I assume as this house price inflation is above wage growth that you see it as abad thing, not a good thing at all.
Capital city dwelling values rose a further 0.5 per cent in August taking the cumulative recovery in residential home values to 7.0 per cent since the market bottomed out in May last year.
RP Data and Rismark International today released housing results which showed dwelling values increased by half a per cent over the month of August. The August result is a slowdown from previous months where capital gains were recorded at a much higher rate; 1.6 per cent over July and 1.9 per cent over June.
The latest results for August take the rolling three month change in capital city dwelling values to 4.0 per cent which is the highest rate of capital gain since the three months ending April 2010.
According to RP Data research director, Tim Lawless, the slower month-on-month result is a welcome sign after the strong growth conditions of previous months fuelled renewed debate around the sustainability of Australian dwelling values.
“The half a per cent gain over the month of August is a much more sustainable rate of growth and will be a welcome turn of events for policy makers. While the recent surge in dwelling values has caused some renewed debate about an Australian housing bubble, it is important to remember that the average annual capital gain over the past decade has been just 4.3 per cent across the combined capital cities. In Sydney the annual rate of growth has seen a much lower decline of 2.4 per cent which is well below current inflation.”
The softer housing market conditions over August can be attributed mostly to a lower rate of growth across the Sydney and Melbourne housing markets where dwelling values rose by 0.6 per cent and 0.2 per cent respectively. Several cities recorded a fall in values over the month, with Hobart seeing the largest decline with a 1.2 per cent fall and Perth values slipping by 0.2 per cent.
According to Mr Lawless, the most significant turnaround in market conditions can be found in Brisbane where the monthly rate of growth jumped to 1.5 per cent. “Brisbane’s housing market has been underperforming since the onset of the GFC with home values still almost 10 per cent lower than their previous peak which was back in November 2009. The strong result for August was evident across both the detached housing and the unit markets and may potentially mark a positive turning point for Brisbane’s housing market.”
Looking at the performance across the broad pricing segments of the market, the RP Data-Rismark Stratified Hedonic Index is continuing to show the broad middle of the market to be the best performing, although the rate of capital gain is gathering some momentum at the more prestigious end of the market. The broad mid-priced market has recorded a capital gain of 5.2 per cent since the start of the year, while the most expensive quartile has seen values increase by a less substantial 4.9 per cent and the most affordable quartile has recorded the lowest rate of growth at 4.4 per cent.
Mr Lawless commented that the spring season this year is likely to show strong housing market conditions.
“Housing market conditions are looking set to provide what could be described as a near-to perfect spring season with the number of homes currently available for sale around 15 per cent lower than a year ago.
“In Sydney listing numbers are about 28 per cent lower than a year ago. The lower effective supply levels are a result of fewer new listings being added to the market and a higher rate of absorption, with a 30 per cent increase in sales activity compared with a year ago. We are already seeing a substantial increase in real estate agent activity across the RP Data platforms which indicate a surge in pre-listings activity,” Mr Lawless said.
Rismark CEO Ben Skilbeck added, “While the owner-occupier segment of the market is more than twice the size of the investor segment, there continues to be a number of indicators suggesting that this spring investors will be punching above their weight. With year-on-year gross total returns being 10 per cent across the combined capital cities (11.7 per cent in Sydney), and borrowing costs close to half of this, it’s likely investors will continue to the attracted into the market. The rate of growth in lending commitments for the purchase of existing dwellings, continues to be material higher for the investor segment than the owner-occupier segment.”
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