House values were still up in other capitals, however, with Adelaide up 2.1 percent, Brisbane up 1.1 percent, Sydney up 0.5 percent, and both Perth and Hobart up 0.2 percent. Despite slowing conditions across the country, the median house price in Sydney still managed to break the $800,000 mark for the first time. While this psychological level would normally be seen as a sign of strong conditions, weak price growth and other figures would suggest otherwise.
Along with a significant drop in price growth, auction clearance rates, average selling time, and vendor discounting rates are also falling across Australia. After ten weeks of strong results earlier in the year, Sydney's auction clearance rates have been sitting below 80 percent for the last four weekends. While clearance rates in Melbourne are still strong, there are also suggestions of weakening conditions in the Victorian auction market.
According to Tim Lawless of RP Data, recent data could suggest peak growth as the market steps down a gear into more sustainable territory: “It suggests to me that the market is still at a very strong place but probably right at peak growth... When you look at a market like Sydney I think that very high median price is quiet reflective also that we are seeing a lot of activity in the market place now and in Melbourne at the upper end of dwelling prices."
The latest figures reflect a slowing trend in price growth according to Mr Lawless, with a changing of the guard between states also likely: “We were always of a view that the capital gains we have seen in Australia’s two largest cities, Sydney and Melbourne, was unsustainable... The market does naturally slow down, that’s what has happened over each cycle, we will probably find as growth rates start to taper away, we will find the weaker performing cities may potentially start to pick up some pace."
Some markets are likely to slow down more than others, with Brisbane perhaps the strongest candidate for growth. The Sunshine State capital has more room to move than Sydney and Melbourne in almost every way, with prices, geography, and population all pointing to growth. “Brisbane is probably the obvious candidate there. Affordability is nowhere near as much an issue as it is in Sydney, yields are still very strong, population growth is strong, the labour market is relatively strong. I think that will probably be the market place that bucks the trend of a slowing market and starts to gather some pace.’’ said Mr Lawless.