This article is from the Australian Property Journal archive
HOUSE price growth has moderated as demand at the top end of the market eased, according to Australian Property Monitors’ Quarterly Housing Report.
The report shows national house price growth slowed to 2.4% in this quarter to $558,540, although prices are still tracking 15% higher compared to $483,201 a year ago.
APM economist Matthew Bell said the lower end of the market outperformed the top end in nearly all major housing markets for the first time in over a year since this has been the case.
“The June quarter has seen one other turnaround in the market. During the worst months of the GFC, it was the affordable end of the market that sustained Australian house prices. For the majority of last year’s recovery, the extraordinary growth in house prices was largely driven by the top end of the market in nearly every capital city.
“In this most recent quarter however, we have seen a return to the less expensive end of the market outperforming the top end in all major housing markets with the exception of Brisbane. This will come as a surprise to many commentators given the six nearly consecutive interest rate rises up to May,” he added.
Meanwhile Bell said investors have also filled in demand from owner-occupiers, particularly the drop-off in first-home-buyers.
Most markets around the country saw modest growth for the quarter. Sydney has had its fifth consecutive quarter of growth, house prices rose by 2.3% to $625,000 and units up by almost 3% to above $435,000 in June — pushing annual growth to over 13%, well above the long-term trend.
Canberra remains the second strongest housing market in the country with the annual rise in median house price coming in at over 16.5%, with the median house price fast approaching $600,000.
Melbourne was another star performer, despite quarterly growth falling to the lowest rate since March 2009, house prices jumped by 4.4% to $578,447 and units rose by 3.8% to $415,000. Annual house price growth remains above +25% as June 2010 quarter growth rate matches the June 2009 growth rate.
Brisbane was the anomaly, achieving only 0.6% growth in the quarter with annual house price growth of 7.3% and unit price growth of 5.6% – the lowest of all mainland capital cities. Adelaide’s median house price broke the $450,000 for the first time and unit prices remains the most affordable of all mainland capitals with median price still under $300,000.
Perth’s market was flat in the June 2010 quarter for both houses and units. House prices were marginally higher (0.6%) to $525,574 and units were 0.1% higher at $391,247.
Hobart’s had the title of weakest housing market in the country with house prices down nearly -2% in the June quarter to $308,434, up only +6.2% in the last 12-months.
Finally in Darwin, the median house prices pause after rising more than 10% in six months, down -0.7% in June quarter to $581,290. However units price growth was strong rising 8.9% to $434,453.
Bell predicts further price growth moderating in the next three to six months as the low levels of housing finance and the risk of further rate increases weigh on the market.
“However, the medium-to-long-term outlook for property prices remains strong, and we expect the 2010 annual rate of national house price growth to settle in the eight to 10% range,” he concluded.
Australian Property Journal
