Australian Property News
Outlook for property prices remains strong
Posted on Thursday, July 29 2010 at 9:49 AM
Robust demand for properties in Australia’s more affordable capital city suburbs has driven solid house price growth in the June quarter, according to the Australian Property Monitors (APM) Quarterly Housing Report
Nationally, house price growth slowed to 2.4 per cent in this quarter, moderating in most capital cities, however annual house price growth is still charging ahead at more than 15 per cent. The lower end of the market outperformed the top end in nearly all major housing markets for the first time in more than a year.
“Over the quarter we have seen increased investor activity mitigate the fall in demand from owner-occupiers, particularly the drop-off in first homebuyers,” says Matthew Bell, economist for APM. “However, the overall strong results in each market – with the exception of Brisbane – will certainly come as a surprise to many, given the six interest rate rises to May, and considering last year’s house price recovery post-GFC was driven by extraordinary growth in the top end of the market.”
Most markets around the country saw modest growth for the quarter, contributing to the persistent high year-on-year figures. In what was the fifth consecutive quarter of house price rises for Sydney, house prices increased by just over two per cent (2.3 per cent) and unit prices went up by almost three per cent, pushing annual growth to more than 13 per cent, well above the long-term trend.
The current Sydney median house price is now above $625,000 and the median unit price above $435,000. Melbourne was another star performer; despite quarterly growth plummeting to the lowest rate since March 2009, a result of over 4.4 per cent has meant Melbourne is still a relatively hot market.
Canberra remains the second strongest housing market in the country with the annual rise in median house price sitting at more than 16.5 per cent, with the median house price fast approaching $600,000.
Brisbane was the anomaly, achieving only 0.6 per cent growth in the quarter with annual house price growth of 7.3 per cent and unit price growth of 5.6 per cent – the lowest of all mainland capital cities.
“APM expects further price growth moderation in the next three to six months as the low levels of housing finance and the risk of further rate increases weigh on the market. However, the medium to long-term outlook for property prices remains strong, and we expect the 2010 annual rate of national house price growth to settle in the eight to 10 per cent range,” says Bell.
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