The Australian property market experienced healthy growth
over winter, with the strongest capital gain recorded in seven years. According to the latest RP Data Hedonic
Index, property values have increased 4.2 percent nationwide over the last
three months. While higher than expected
growth can mostly be attributed to strong performance in Sydney and Melbourne,
the majority of capital cities also experienced growth, albeit at more moderate
levels. Melbourne led the way over winter, with property values jumping by 6.4 percent. ; Sydney was not far behind with 5 percent growth, with the nation's capital, Canberra, also fighting off the winter blues to deliver 2.5 percent growth for the winter quarter. ; Values were also up in other cities, with Adelaide up 1.5 percent, Brisbane up 1.3 percent, and Perth up 1 percent. ; Only Darwin and Hobart experienced negative growth for the quarter, with values down 0.6 percent and 0.8 percent respectively.
On an annual basis, Australian property is 10.9 percent higher than a year ago, as prices continue to grow beyond expectations in Sydney and Melbourne. The median dwelling price in Sydney is now $650,000, with 16 percent annual growth making it the most expensive city in Australia to buy property. ; Hobart is the most affordable city with a median value of $310,000.
The price difference between capitals highlights the growing two-speed nature of the Australian property market, with Sydney and Melbourne on one side of the great divide and other capitals left behind. ; For example, recent price increases in Sydney have made the NSW capital roughly 40 percent more valuable than Brisbane, a figure that has grown from just 5 percent back in 2007. ; This huge discrepancy is an ongoing issue for the Australian market, as the gap gets wider and wider due to booming Sydney conditions.
The last week of winter was also positive in terms of property sales, with a nationwide clearance rate of 72.2 percent. ; Clearance rates were also uneven across the country, however, with Sydney enjoying 81.8 percent, Melbourne 71 percent, and Adelaide 66.1 percent. ; Other capitals were more subdued, with Brisbane recording a clearance rate of 47 percent and Perth 46.2 percent. ; With a rise in listings, strong clearance rates, and healthy price growth in key markets, some experts are expecting a record breaking spring.
While growth in Sydney and Melbourne has led to the strongest results in seven years, according to Tim Lawless from RP Data, growth in the remaining capitals was much more in line with expectations: ; “This time of the cycle and this time of the year there are no surprises there... The growth rates outside of Sydney and Melbourne are much more sustainable... We wouldn’t expect a slowdown in those markets; we expect them to gain some momentum, except for maybe Perth and Darwin. They have been through the peak of a growth phase already.’’