House prices on the rise

Price growth experienced a revival in the December quarter across most capital city housing markets, with Sydney the “runaway leader”, according to the Domain Group’s ‘House price report’.

Data from the report shows the national median house price increased by 2.1 per cent over the December quarter, contributing to a 7.1 per cent increase for the year. The national median unit price increased by 1.7 per cent in the same quarter and 6.0 per cent over 2014.

“This quarter’s strong national results are largely due to the momentum of the Sydney market, which is still achieving consistently strong growth,” said Dr Andrew Wilson, senior economist, Domain Group.

He said the city’s high migration levels, chronic shortage of housing, and strong buyer and seller confidence are helping to keep Sydney the dominant force among the capital cities.

Over the December quarter, Sydney’s median house price increased by 4.1 per cent while the median unit price rose by 2.9 per cent. During the year, the median house price in the city rose by 14.1 per cent and unit prices increased by 10.4 per cent.

Of the other capitals, Brisbane house prices increased solidly by 1.5 per cent over the December quarter after recording a fall in the September quarter.

Melbourne’s house prices increased slightly by 0.6 per cent over the quarter and 3.4 per cent over the year. In Adelaide, house prices experienced a marginal increase of 0.3 per cent over the quarter, while unit prices fell by 1.2 per cent during the same period.

Hobart saw its second consecutive quarter of house price growth, while Canberra continued to record volatile results. Perth house prices increased by a modest 1.0 per cent during the quarter, while unit prices rose 0.6 per cent.

Darwin was the only capital city to experience a fall in median house prices over the quarter, with a drop of 6.0 per cent recorded. Median unit prices were down 4.3 per cent over the three months.

“Within an environment of stagnant national economic growth, house price cycles are set to generally flatten in most capital cities, with the exception of Sydney. Further rate cuts, should they occur, will likely have a minimal impact on housing affordability,” said Dr Wilson.