This article is from the Australian Property Journal archive
THE median house price in Sydney has smashed the $1 million ceiling – surpassing London and catching up with New York, after rising 8.4% in June quarter and 22.9% over the last 12 months.
/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-qformat:yes;
mso-style-parent:”;
mso-padding-alt:0cm 5.4pt 0cm 5.4pt;
mso-para-margin:0cm;
mso-para-margin-bottom:.0001pt;
mso-pagination:widow-orphan;
font-size:10.0pt;
font-family:”Times New Roman”,”serif”;
mso-fareast-language:EN-US;}
The Domain.com.au June House Price Report shows that Sydney`s median house price topped $1,000,616, whilst unit prices also surged over the quarter by 6.6% to $656,078.
Domain senior economy Dr Andrew Wilson said the harbour city median house price has now surpassed that of London and is fast approaching New York.
In comparison, recent figures from Nationwide in the UK shows London`s median house price fell 0.2% in June to £429,711 (approx $A906,000), whilst New York prices averaged $US750,000 (approx $A1,012,507), according to brokerage firm Corcoran Group.
“Sydney’s median house price has increased by 22.9% over the 2014-15 financial year which is one of the highest annual growth rates ever recorded by the city. It’s a result that is now exceeding the boom time results of 2001 and 2002,” Wilson said.
“The main catalyst has been low mortgage rates — the lowest since the mid 1960s. It’s a perfect storm of local supply and demand factors generating the price growth. A strong local economy, coupled with high levels of migration and a chronic undersupply of housing and record levels of investor activity have also been a significant contributor.
“Confidence and momentum will continue to sustain the Sydney market through the remainder of 2015, although growth rates are unlikely to match the record-breaking June quarter performance,” he added.
Sydney`s annual growth doubled the national median house price growth of 11.7% to $701,827.
Melbourne recorded the second highest result after rising 3.5% during the quarter to a new record price of $668,030 – modest in contrast to Sydney. The median unit price also increased by 3.2% over the quarter, also to a new record $443,549.
The median house price is 10.3% higher than 12 months ago and unit prices are up 4.5% over the same period.
Dr Wilson said the strong prices growth over the last 12 months has been generated primarily by aspirational buyers, particularly in Melbourne’s eastern suburban regions.
“Rising buyer activity in suburbs west and north of the city also contributed to the house price growth.
“We are yet to see the impact of recent record levels of inner city apartment construction, however, a number of factors including an improving local economy, falling unemployment, low interest rates, rising confidence, a surging population and increased investor activity have been key ingredients in the Melbourne market’s upswing this year,” he added.
The Brisbane median house price increased by just 0.6% over the quarter to $490,855 with unit prices up by 1.0% to $371,508. House prices are marginally higher by 1.9% over the past year, however unit prices have fallen by 3.2%.
“Underperformance by the local economy and fragile buyer sentiment continues to impede buyer activity and prices growth in Brisbane. Buyer activity in the inner and middle zones of city remain solid, while the budget markets to the west and north of the city are showing early signs of a sustained revival,” Dr Wilson said. “Significant recent inner-city apartment construction will likely continue to push supply well ahead of demand in this market sector and impede prices growth,”
Adelaide house prices nudged up by 0.2% to $479,285, however unit prices fell by 2.7% over the quarter to $292,399. Over the year, house prices are 3.3% higher whilst unit price is up by just 0.6%.
“The prospects of a solid recovery in buyer activity for the Adelaide market have lessened with recent results indicating a generally fragile buyer sentiment. A sustained improvement to the local economy would be the key to driving house prices — in particular a fall in the high levels of unemployment.
“Adelaide remains the most affordable mainland capital city with relatively high yields and low vacancy rates likely to attract increasing numbers of investors. The outlook for the market remains mixed for the remainder of 2015, though prices growth for the year is likely to match last year’s result,” Dr Wilson said.
Not surprisingly, the Perth median house price fell by 0.9% over the June quarter to $605,089 and unit prices declined by 2.1% to $405,417. Over the last 12 months, Perth’s median house price has fallen by 1.4%, while unit prices are down by 2.1%.
Median house prices in Hobart were steady at $325,972, an increase of just 0.6% over 12 months. Unit prices were also flat at $272,932, down by 1.6% over the year.
The Canberra median house price increased by 1.5% over the quarter to $616,313, up 5.4% over the year.
“Canberra has now recorded three consecutive quarters of house price growth for the first time since 2009. However while house prices are performing well, unit prices did fall sharply over the quarter down by 6.3% to $382,350, down by 6.8% year-on-year,” Dr Wilson said.
Finally, Darwin house prices rebounded, up 1.6% over the June quarter to $654,270. Although this was an increase of 1.8% over the 2014-15 financial year, Darwin’s median house price still remains below the peak $680,337 recorded over the December quarter 2013.
Australian Property Journal
