According to Domain Group’s House Price Report: September Quarter 2016, Australia has a “two speed property market,” with some capitals hitting record high prices while others declined. While the national median house price increased by 1.7% over the quarter, varying levels of local supply and demand are delivering mixed results for individual capitals.
According to Dr. Andrew Wilson, chief economist at Domain Group, “low interest rates, increased investor activity, strong migration and robust local economies have [fueled] rising buyer momentum in both the Sydney and Melbourne markets.” He predicts the relative shortage of listings and increased interest from investors will continue to drive price growth in the Sydney and Melbourne markets for the remainder of 2016.
In contrast, economic woes and a depressed housing market continue to plague Western Australia and the Northern Territory, with house prices continuing to decline in Perth and Darwin. “Local economic performance will determine whether there is a return to price growth in these capitals over the remainder of the year,” said Dr. Wilson.
Though house price growth was on the decline in the previous September quarter, the “boom is back” for Sydney, with house prices reaching a new record level of $1,068,303—a 2.7% increase. This is the strongest quarterly growth rate since September 2015.
Despite the strong quarterly growth, house prices in Sydney have only increased 2.1% over the past year. This is the lowest annual growth rate for the capital since September 2012.
Meanwhile, Sydney unit prices reached $685,865 in the September quarter, a solid 1.1% increase and an annual growth of 0.9%.
Melbourne is also on a roll, with house prices hitting a new record of $773,669—a quarterly price growth rate of 3.1% and an annual increase of 9.1%. This is Melbourne’s 16th consecutive quarter of growth.
Unit prices also increased significantly to $466,779, a growth rate of 4.5% over the September quarter and 5.5% over the past year.
Continuing the downward trend from the previous September quarter, Perth house prices fell once again this quarter, decreasing by 2.0% to $566,609. “Falling 3.8 per cent over the past year, the median house price in Perth is now at the lowest point recorded since March 2013.”
The steep price falls for Perth unit prices eased slightly this quarter, decreasing by 0.8% to $364,752, its strongest quarter this year. Annually, Perth unit prices have fallen by 6.2%.
Darwin’s median house price fell for the 5th consecutive year, dropping 3.3% to $595,466—an annual decrease of 10%. Median house price has fallen below $600,000 for the first time since the June quarter of 2012.
Though house prices continue to decline, the capital’s median unit price has remained stable this quarter at $448,418, an annual increase of 3.9%.
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