Aussie property prices bounce back

House prices have increased in almost every capital city across Australia over the last quarter, bouncing back from recent price falls.

The national median house price increased 1.5% over the quarter, and 2.7% year-on-year, with strong growth experience in Sydney, Melbourne, Brisbane, Adelaide, Canberra and Hobart.

Perth and Darwin are the only exceptions to the trend, with both suffering sharp price falls of 1.7% and 0.7% respectively.

While median unit prices have also increased, record levels of apartment building have led to an oversupply issue in some capital cities.

Also read: Aussie home value growth swelled in these two areas

Sydney

Sydney’s median house price rose to $1,021,968 this quarter, increasing by 2.4%, once again breaking the $1 million mark.

Although prices have gone up, they are still below the capital’s record level of $1,032,899 reported in September 2015.

Sydney house prices have increased 1.2% over the past year – the lowest annual increase in 4 years.
Sydney unit prices increased to $669,830, a 0.6% quarterly growth and an annual increase of 0.4 per cent, which is the lowest yearly growth since December 2011.

“Last quarter, Sydney house prices dropped below $1 million, but they have bounced back as lower interest rates boost market confidence,” Domain chief economist Andrew Wilson said.

“The current growth rates are significantly lower than the rises during Sydney’s property boom but, with the revival of investor activity, it’s likely there are more increases coming for the capital.”

Melbourne

Melbourne median house prices have hit a record high of $740,995, an increase of 1.5%.

While the June quarterly increase is marginal, Melbourne prices have increased for twelve consecutive quarters and grown a staggering 7.4% over the past year.

Melbourne unit prices have risen to $450,933, a quarterly growth of 3.5% and an annual increase of 2.7%.
“Melbourne’s growth over the past year is the strongest result in the nation,” Wilson said.

“The new record for median prices reflects the robust market, strengthened by rising buyer and seller confidence.”

Also read: More suburbs join Sydney’s million-dollar club

Brisbane

The Brisbane median house price has increased to $521,915, over the June quarter, representing a 1.2% increase.

The 4.3% annual increase is a solid result, consistent with Brisbane’s steady rise in recent years.

Median unit prices continued to fall, declining by 1.8% to $370,251, with an annual decline of 3.2%.

Brisbane unit prices are now at the lowest point since the March 2013.

“The upswing in house prices is a promising sign for Brisbane homeowners and investors, however the eighth consecutive quarter of median unit price falls clearly suggests that oversupply and weak demand continue to impact the market,” Wilson said.

Adelaide

Median house prices in Adelaide have hit a record high, rising to $498,927.

House prices increased 0.9% over the June quarter and a solid 4.4% over the year.

Adelaide median unit prices continued to fall, declining by 1.7% to $294,165 while annual price growth in the capital is up by 0.1%.

“Adelaide is a split market, with house prices on the rise and unit prices lagging,” Wilson said.

“The recent surge of new apartment construction has left the local market sluggish, surpassing the demand from buyers.”

Perth

Perth median house prices have continued to fall in the June quarter, declining by 1.7% to $568,132.

This is the sixth consecutive quarter of price falls for the capital, with the median price now at the lowest point since March 2013.

Over the past year, Perth house prices have fallen by 5.6%  – second only to Darwin for poor market performance.

Perth median unit prices fell to $367,025, down by 2.4% over the quarter and 7.8% per year.

“Like many of the capital cities, Perth is feeling the price shock brought on by a surplus of newly constructed apartment buildings that exceeded buyer demand,” Wilson commented.

“Coupled with steep annual falls in house prices, the capital is a long way away from returning to a healthy market.”

Also read: Are cracks starting to appear in Australia’s property market?

Hobart

Median house prices in Hobart increased to $345,880, a marginal growth of 0.3% over the quarter.

While Hobart is still clearly the most affordable capital city for buyers, it has noteworthy annual growth, with prices increasing by 2.6% over the past year.

In contrast to most of the nation Hobart median unit prices increased by a robust 2.5% over the quarter, to $276,312.

Meanwhile, Hobart’s unit prices in the capital city have grown by a staggering 10.4% over the past year.

“While prices remain low in Hobart, especially in comparison to a market like Sydney, the capital has had impressive annual growth and continues to thrive.”

“With lower interest rates stimulating investor activity, it’s likely we’ll see prices continue to climb,“ he said.

Canberra

The median house price in Canberra increased to a record $654,306, over the June quarter, a 3.1 rise, representing the strongest growth of all the capital cities.

Canberra is second only to Melbourne for annual growth, with house prices rising 4.8 per cent over the past year.

Canberra median unit prices fell 1.6 per cent to $399,505, decreasing 4.4 per cent over the past year.

Canberra unit prices are now at their lowest since December 2009 as high levels of apartment construction push supply ahead of demand.

“Canberra was the top market performer this quarter, surpassing the rest of the nation’s capitals with a strong growth in house prices,” Wilson said.

“As market conditions continue to strengthen, it’s likely that Canberra prices will remain on the rise.”

Darwin

Darwin’s median house price fell for the fourth consecutive quarter, dropping by 0.7% to $613,590.

Darwin median house prices have fallen by 7.7% over the past year, the weakest result for the capital since December 2011, and the sharpest decrease out of all the capital cities.

Median unit prices in Darwin have steadied, with no change over the June quarter and a marginal decrease of 1.5% over the past year.

“Darwin prices have continued to decrease as demand from resource industry workers dwindles in line with the downturn of the mining economy,” Wilson said.

“We have yet to see an impact from the new supply of apartment buildings on the market and, for now, unit prices are steady.”