Sydney slows, Perth falls, Melbourne moderates and Brisbane patchy: Domain
The great Sydney house price boom has ended, Domain senior economist Dr Andrew Wilson says after house price growth tracked back sharply over the September quarter.
Sydney recorded a median house price of $1,032,433, up 3.2% over the quarter — the lowest quarterly rate of growth reported since March 2014.
Sydney’s unit prices increased by 1.5% over the September quarter to $673,182 – an annual rise of 15.1%. Its rate of growth this quarter was also down significantly when compared to the record 7.4% reported over the June quarter.
“The extraordinary house price growth Sydney has recorded over the last three years is now clearly receding, although price growth remains relatively strong and well ahead of all other capitals except Melbourne. Sydney’s house prices have increased by a remarkable 21.7% over the year ending September,” Dr Andrew Wilson said.
“Nothing will slow a market more than higher interest rates and the enthusiasm of a bullish market has now started to wane,” he told Domain.
The Melbourne median house price increased by 2.8% over the September quarter – exceeding $700,000 for the first time. With a median house price of $707,415, Melbourne is clearly the second highest capital city housing market, still well behind Sydney but ahead of the next placed Darwin.
While a strong result, Melbourne house price growth over the September quarter was well below the 6.0 % recorded in the previous June quarter. Melbourne unit prices increased by 1.9 % over the September quarter to $435,674 with annual prices rising by 2.4%.
“Despite the retreat in the rate of house price growth over the September quarter, Melbourne’s median house price increased by 15.6% over the year which was the highest annual result recorded since June 2010,” Dr Andrew Wilson said.
The Brisbane housing market reported another modest result for house price growth over the September quarter. Its median house price increased by just 0.8% to $497,143 with annual prices up by 3.6%. With the market remaining largely subdued, it is likely that Brisbane house price growth this year will be well below the 6.5% recorded over 2014.
Brisbane unit prices fell by 0.6%over the September quarter to $362,737, a drop year-on-year of 5.6%.
“This was the fifth consecutive quarter of falling unit prices in Brisbane. With high levels of new apartment construction entering the market over the past year, supply has pushed well ahead of demand.”
The Adelaide housing market reported a relatively flat result over the September quarter, with the median house price increasing by just 0.3% to $485,873. This modest result follows two strong quarters of growth with the annual house price still up by 5.1%.
Adelaide unit prices also increased slightly, up by just 0.6% over the September quarter to $293,711.
“Despite a subdued September quarter of growth, Adelaide’s house prices are still likely to increase at a faster rate this year than the 3.3%recorded over 2014. Year-on-year unit prices have fallen by 1.7%, suggesting that the strong supply of inner city units is moving the market ahead of demand.”
The Perth housing market continued to decline over the September quarter, recording its sharpest fall in house prices since June 2011. The median house price in Perth fell by 2.4% to $589,100 and is now below $600,000 for the first time since the September quarter 2013.
Perth unit prices also fell sharply over the September quarter down by 3.7% to $390,916 for an annual decline of 2.8%.
“Perth house prices have now fallen by 3.2% over the past year with only Darwin recording a lower rate of annual house price growth. The sharp deterioration in the local economy and significant increases in jobless numbers has affected buyer and seller confidence. This continues to impact Perth housing market activity,” Dr Wilson said.
Hobart’s house prices increased marginally over the September quarter, up by 0.9% to $346,370.
Rebounding strongly, Hobart’s unit prices performed well over the quarter increasing by 8.5% following a 4.5% fall over the previous June quarter.
The Hobart median unit price is at $269,302 – an increase of 6.1% over the past year.
“Despite the modest increase in house prices over the quarter, strong growth earlier in the year has Hobart’s house prices up by 6.5% year-on-year and are on track to increase over 2015 at a significantly higher rate than the 1.3% recorded last year,” Dr Wilson said.
The Canberra median house price increased by 2.3% over the quarter to reach $625,092. House prices have now increased by 7.8% over the past year, representing a rate of growth behind only Sydney and Melbourne of all the Australian capitals.
Canberra’s median unit price fell by 4.7% over the September quarter to $385,825 to be below $400,000 for the first time since the December quarter 2009. Annual unit prices in Canberra are now down by 5.7%.
“Canberra’s annual house price growth rate is the highest recorded by the local market since September 2010 with prices growth this year set to clearly exceed the 3.1% recorded over 2014. The strong result recorded by the Canberra housing market over the September quarter is reflective of rising buyer confidence, which has been restored after a subdued period of buyer activity.
“While house prices have grown strongly in Canberra this year, unit prices continue to decline. This suggests the high levels of new apartment construction over recent years have moved supply ahead of demand,” Dr Wilson said.
Darwin’s house prices decreased by 2.3% over the September quarter to $639,042 following strong growth of 3.6% recorded over the June quarter.
Darwin unit prices were also down sharply over the September quarter falling by 6.1% to $408,904 – an annual decrease of 6.9%.
“The Darwin median house price has fallen by 5.1% over the past year, which reflects reduced demand from interstate job seekers and an associated weakening of local economic activity.
“Recent high levels of new apartment construction in Darwin area are a significant factor in weaker unit market performance,” Dr Andrew Wilson said.
