Australia has a two speed property market, with some capitals hitting record high prices while other markets weaken, according to the September quarter Domain House Price Report.
Nationally the median house price increased by 1.7 per cent over the quarter, but varying levels of local supply and demand are delivering mixed results for individual capitals.
Melbourne and Sydney prices have hit new record highs, with both capitals growing at the fastest rate in over a year. Median house prices in Canberra and Hobart have also increased, although Hobart units fell sharply. In contrast to the booming capitals, Brisbane, Adelaide, Perth and Darwin median house prices all fell this quarter.
Key takeaways from the September Quarter Domain.com.au House Price Report:
- Record high prices in Sydney, Melbourne and Canberra
- Melbourne is the top market performer for price growth
- Solid house price increase in Hobart
- House price decreases in Perth, Darwin, Brisbane and Adelaide
- National median house price up 1.7 per cent over the quarter and 3.5 per cent year-on-year
Sydney
The boom is back for Sydney, with house prices reaching a new record level of $1,068,303, a 2.7 per cent increase and the strongest quarterly growth rate since September 2015.
Despite strong quarterly growth, house prices in Sydney have only increased 2.1 per cent over the past year, which is the lowest annual growth rate for the capital since September 2012.
Sydney unit prices reached $685,865 this quarter, a solid 1.1 per cent increase and an annual growth of 0.9 per cent.
“The Sydney market has climbed over winter and into spring with the median price surpassing last year’s boom-time record.
“Lower interest rates and a strong local economy have fuelled house price growth while unit prices also continue to rise despite significant levels of new apartment construction.
“With buyer and seller confidence high, further increases can be expected for the remainder of 2016,” said Domain Chief Economist, Dr Andrew Wilson.
Melbourne
Melbourne house prices have also hit a new record of $773,669, a quarterly price growth rate of 3.1 per cent and annual increase of 9.1 per cent. This is the capital’s sixteenth consecutive quarter of growth.
Melbourne unit prices have also increased sharply to $466,779, a growth rate of 4.5 per cent over the September quarter and 5.5 per cent over the past year.
“The Melbourne housing market continues to grow at the fastest rate of all the Australian capital cities. With a strong spring auction market ahead, robust price growth is likely to continue through 2016 as demand pushes ahead of supply.
“Melbourne’s high levels of migration mean that record levels of new apartment construction is not impacting unit prices which continue to grow,” said Domain Chief Economist, Dr Andrew Wilson.
Brisbane
Brisbane house prices decreased by 0.9 per cent, to $521,152, over the September quarter. The quarterly decline is in contrast with an annual growth of 3.2 per cent, one of the strongest annual performances of all capital cities.
Brisbane unit prices also decreased to $367,518, falling 2.9 per cent over the quarter and 3.8 per cent over the year. Brisbane unit prices are now the lowest since December 2012.
“A mixed economic performance and fragile buyer and seller confidence has encouraged a modest fall in Brisbane prices this quarter, but a resumption in price growth is likely over the remainder of the year with increasing investor and first home buyer activity,” said Domain Chief Economist, Dr Andrew Wilson.
Adelaide
Adelaide house prices decreased marginally over the September quarter, falling by 0.3 per cent to $494,911. Similar to the Brisbane market, the fall is in contrast to a strong annual growth of 2.8 per cent.
Adelaide unit prices also fell over the September quarter, decreasing by 1.3 per cent to $301,939. This was the second consecutive fall in unit prices and the sharpest fall recorded in three years.
“Following six consecutive quarters of growth, the Adelaide market has consolidated with a marginal weakening of house prices.
“Despite an underperforming local economy, house price growth in Adelaide has proved resilient and looks likely to resume over the rest of 2016, reflecting recent strong results of the spring auction market,” said Domain Chief Economist, Dr Andrew Wilson.
Perth
Perth house prices continued to fall this quarter, decreasing by 2.0 per cent to $566,609. Falling 3.8 per cent over the past year, the median house price in Perth is now at the lowest point recorded since March 2013.
The steep price falls for Perth unit prices eased slightly this quarter, decreasing by 0.8 per cent to $364,752, its strongest quarter in 2016. Annually, Perth unit prices have fallen by 6.2 per cent.
“The Perth market failed to maintain the gains of the previous quarter with house prices down sharply again. Perth unit prices also continued to fall, although the rate of decline appears to be easing.
“A sustained revival in prices growth remains dependent on an improvement in the local economy and a revival in consumer confidence” said Domain Chief Economist, Dr Andrew Wilson.
Hobart
Median house prices in Hobart increased by a solid 2.3 per cent this quarter, reaching $338,703. Despite sustained growth over the past year, with prices climbing by 1.5 per cent, Hobart remains the most affordable capital city in the nation.
In contrast, Hobart’s median unit price has decreased to $251,073, a significant 9.2 per cent fall over the quarter and 11.7 per cent annual decline.
“Hobart house prices rebounded strongly over the September quarter following a sharp fall recorded over the previous quarter. Local economic performance remains the key to sustained growth in prices however buyer and seller confidence in the capital has certainly improved over the past year,” said Domain Chief Economist, Dr Andrew Wilson.
Canberra
The median house price in Canberra has increased again this quarter to $661,912, a marginal growth of 0.4 per cent. Canberra is a strong market performer, second only to Melbourne for annual growth, with prices rising 4.9 per cent over the past year.
Bouncing back from last quarter’s decline, Canberra median unit prices increased by 1.3 per cent, reaching $403,775. Overall, unit prices have fallen by 1.3 per cent over the past year.
“The Canberra housing market continues its recent robust revival with prices now increasing over 7 of the past 8 quarters. The strong performance of the spring auction market points to further price growth over the remainder of the year.
“Unit prices also increased following consecutive quarterly falls, suggesting that demand is now balancing out recent high levels of new apartment supply,” said Domain Chief Economist, Dr Andrew Wilson.
Darwin
The median house price for Darwin has fallen for the fifth consecutive quarter, dropping 3.3 per cent to $595,466, an annual decrease of 10.0 per cent. The Darwin median house price has fallen below $600,000 for the first time since the June quarter 2012.
While house prices continue to decline, Darwin’s median unit price have remained stable this quarter at $448,418, an annual increase of 3.9 per cent.
“Darwin house prices continue to weaken following the recent decline in migration levels into the city. Another steady result for unit prices signals that demand may now be matching the recent record levels of new apartment construction,” said Domain Chief Economist, Dr Andrew Wilson.
