Australian housing markets have recorded significant rises in house prices over the June quarter.
Jet-propelled by the lowest interest rates in decades, rising confidence and continued generally solid economic performances, buyer activity in most capital city housing markets is now charging towards record levels with the fastest prices growth since the government-stimulated house price boom of 2009 and 2010.
The national house price rose strongly by 2.8 percent over the June quarter to record the best result since March 2010. This was the third consecutive quarterly rise in national house prices which at $564,325 is now at an all-time high and has clearly fully recovered from the correction phase of 2011. National unit prices also rose solidly over the June quarter up by 2.0 percent.
Sydney, Perth and Canberra recorded the highest ever median house prices over the June quarter with Melbourne fast approaching its previous price peak.
Sydney median house prices increased by 2.7 percent to $690,064 over the June quarter with unit median prices also rising strongly by 2.4 percent to $491,845 – both all-time highs.
Melbourne recorded the strongest result of all the capitals over the June quarter with houses up 5.0 percent and units up 3.7 percent. Buyer activity in Melbourne is consistently solid through most price brackets, buyer types and suburban regions.
Significant house price increases over the June quarter in both Sydney and Melbourne are not surprising and reflect consistent analysis and forecasts by APM, particularly with reference to price growth correlation with weekend auction clearance rate data.
Auction clearance rates in Sydney and Melbourne have consistently and unequivocally proven to be a highly accurate guide to the general level of house and unit prices growth in those markets, while other indicators of house price growth including ABS housing loan data provided solid guides to the June quarter house price outcomes.
The Brisbane market continues to consistently record quarterly house price growth albeit at a slow pace with buyer activity impeded by a still underperforming local economy. A significant fall in the median unit price of 2.4 percent over June may indicate an emerging oversupply of new inner-city apartments.
The Perth housing market however continues to surge with house prices up by 3.2 percent and units up 2.5 percent over the quarter. Perth house prices have increased by 7.5 percent over the year with units up by a massive 9.3 percent over the year to June, the best performance by all the capitals. High levels of immigration and a still strong local economy continues to be the local catalyst for house price growth in Perth.
The Canberra housing market has revived over recent months as the impact of an improved local economic performance has filtered into increased buyer activity with house prices up by a solid 1.8 percent over the quarter and 4.2 percent over the year to June.
The Adelaide market is finally showing some consistent signs of price growth with house prices up 0.8 percent and units 1.2 percent over the quarter while though Hobart recorded no growth over the June quarter, house prices have risen by 2.4 percent over the first half of 2013.
The Darwin market continues with its usual seasonally driven volatile housing cycle with prices falling by 2.1 percent over the June quarter however remaining 5.7 percent higher than June 2012. Some recent signs of a deteriorating local economy may however impact on the high-priced Darwin housing market.
Buyer activity is set to accelerate though the remainder of 2013 with market momentum and prices clearly on the rise. The patchiness that has characterised market activity over the past year is diminishing as expected with most capital city markets and market segments at or near record levels and rising. Increased investor activity is a key ingredient of the current prices growth in most markets.
The usually quieter winter market is set to be one of the hottest on record and unlike 2009 and 2010 buyer activity and prices growth will be generated by underlying local drivers and not by massive government stimulus packages.
Source: Australian Property Monitors (Dr Andrew Wilson) (July 25th 2013)