Soaring sydney house prices enjoy second wind

Photo credit: 8LettersUK

Property values surged 3 per cent higher in March while the remaining capital cities showed a relatively flat month for capital gains.

Home values across the combined capital cities increased by 1.4 per cent in March 2015 according to the CoreLogic RP Data Home Value Index, driven by the "exceptionally strong" Sydney result.

With stronger housing market conditions over the first three months of the year, annual home value growth across the Sydney market has rebounded after slowing to 12.4 per cent in December 2014. Sydney is the only housing market where dwelling value growth remains in double digits, with the next strongest performer, Melbourne, showing a much lower rate of annual capital gain at just 5.6 per cent.

Each of the remaining capital cities have recorded an annual rate of growth which is less than three per cent, with values having declined across Perth, Darwin and Hobart over the year.

On a quarterly level, Sydney saw prices climb 5.8 per cent, the strongest quarterly growth rate since home values increased by 6.2 per cent over the three months to April 2009. The strength of the Sydney housing market currently is further highlighted by the fact that since the Reserve Bank cut official interest rates to 2.25 per cent at the beginning of February, auction clearance rates have been above 80 per cent each week.

Melbourne has also seen a fairly strong first quarter with home values rising 3.5 per cent. Similar to Sydney, auction clearance rates have recorded a noticeable improvement since the February interest rate cut.