Australia house prices have strong start to 2015

Australia's house prices have made a strong start to 2015, as capital city dwelling values climbed 1.3 per cent in January 2015. The latest  CoreLogic RP Data Home Value Index, though, highlights the growing two-tier nature of the market, with the largest cities driving the average growth higher.

Melbourne values were up 2.7 per cent over the month and Sydney values increased by 1.4 per cent. Hobart also recorded a strong monthly result with dwelling values up 1.6 per cent.

But three capital cities recorded a decline in dwelling values over the month, with Darwin values down 1.3 per cent, Adelaide recorded a 1.2 per cent decline, whilst Perth values were down 0.6 per cent over the month.

While Sydney continued to be the standout for capital gains, the most significant increase in dwelling values over the past three months was recorded in Hobart where dwelling values moved 4.4 per cent higher, eclipsing the 2.4 per cent quaterly gain recorded in Sydney.

"Generally, Hobart has recorded the lowest rate of capital gain since the onset of the GFC, however housing market conditions have been improving," comments Head of Research Tim Lawless. "Local economic conditions have been improving and Hobart homes are the most affordable of any capital city. Additionally the market is benefitting from the return of 'lifestyle buyers'. After Darwin, the southernmost capital is also showing the second highest gross rental yields of any other capital city."