Australian Property News

Canberra leads with slow price growth for the December quarter

Posted on Tuesday, February 01 2011 at 5:18 PM

Canberra has pitter-pattered ahead of all Australian capitals with 1.9 per cent house price growth for the December quarter, according to an Australian Bureau of Statistics (ABS) house index released today.

The ABS' House Price Indexes: Eight Capital Cities for the December 2010 quarter reports that across all capitals the weighted average for established houses increased just 0.7 per cent in the December quarter of 2010.

Closely following Canberra's 1.9 per cent lead was Sydney with 1.6 per cent growth. Melbourne followed next with 1.3 per cent, then Adelaide and Hobart (both 1.1 per cent), Brisbane (0.7 per cent) and Perth tailing with a decline of 3.2 per cent. Darwin remained unchanged.

The miniscule price growth across the capitals and even decline in price growth for Perth is the result of rising interest rates, particularly the surprise rise in official rates on Melbourne Cup Day, said WBP Property Group chief executive officer Greville Pabst.

"I would also point to bank rises above official rates as having a psychological impact on homebuyers," he said.

"While there's no question that interest rates made an impact on the property market, it's not been universal with many affordable locations continuing to show growth in the December quarter."

Taking a look at the annual price growth for established houses to the December quarter, the ABS House Price Index figures also highlight the underlying strength of price growth in the Melbourne (10.8 per cent), Sydney (7.4 per cent) and Canberra (6.5 per cent) property markets, said Pabst.

"Despite all the talk of two-speed economies, when it comes to property, it's these 'old economy' markets which are leading the way," he said.