Australian property price growth to be short-lived

Photo credit: 8LettersUK

The report reveals that prices of real estate in the country's capital cities jumped 2.3 per cent in March 2014, with prices climbing in every state. Every capital city apart from Perth showed a rise in prices on a quarterly basis, led by Melbourne's increase of 5.4 per cent.

While growth is highly positive, with Sydney recording a staggering rise of 15.8 per cent compared to the previous market peak, though, it is expected to be short-lived. Indeed, part of the positive performance has been attributed to seasonality, with March and September traditionally regarded as strong months for the country's housing market.

"We expect housing market conditions to cool down as the year progresses," forecasts RP Data research director Tim Lawless. "If the pace of capital gains doesn’t slow, we may see higher interest rates realised much earlier than previously expected."

"There should be little surprise that, in the presence of high auction clearance rates and in the absence of any major economic changes, the March month delivered materially stronger performance than the flat February result," added Rismark's director Ben Skilbeck.