Australian city home prices up in 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. Nonetheless, the increase took the cumulative recovery in residential home price to 7 per cent since the market bottomed out in May last year.
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.”