Australian house prices in capital cities reach record high

Photo credit: 8LettersUK

The capital city index, released today, showed a 1.6 per cent rise month-on-month in prices, taking the index to 0.7 per cent above the previous record high, recorded in October 2010.

Since the beginning of June 2012, capital city properties have seen values jump 8.7 per cent to the end of September 2013.

Sydney led the way with a rise of 5.2 per cent quarter-on-quarter, while Melbourne enjoyed a quarterly rise of 5 per cent.

“We haven’t seen market conditions this strong [for Sydey] since April 2009,” commented Mr. Lawless.

Other capital cities saw values slide, though, with Brisbane and Perth recording dips of 0.3 per cent and 0.1 per cent. Hobart suffered the worst with prices falling quarter-on-quarter by 3 per cent.

The most expensive city is Sydney, with a median house price of $599,000.

 “The Australian housing market is broadly in the middle of a healthy growth phase, however if the growth trend in Sydney and Melbourne continues at the same pace into 2014, then there may be some cause for concern,” commented RP Data research director and analyst Tim Lawless.

“At the current quarterly pace of growth, capital gains in Sydney and Melbourne are running at an annualised rate of around 20 per cent which is approaching the highs of previous growth cycles. While this scenario is unlikely to occur, if such a high rate of growth continued for a sustained period, it would have the potential to push home values above what might be considered sustainable market value.”