Strong growth in capital cities, particularly BRISBANE

Winter heralds strong growth in capital cities, particularly BRISBANE

Since the property market bottomed out in May last year, capital city residential home values have grown a cumulative 7%, suggesting that the market is well past ‘recovery’ stage.

RP Data released housing results showed dwelling values increased by half a per cent over August, a slowdown from previous months, but an encouraging sign for the market.

July growth was recorded at 1.6% and June growth at 1.9%, taking the rolling three month change in capital city dwelling values to 4%. This is the highest rate of capital gain since the three months ending April 2010.

RP Data research director Tim Lawless said the slower month-on-month result is a welcome development for the sustainability of Australian dwelling values.

“The half a per cent gain over the month of August is a much more sustainable rate of growth,” he said. “It is important to remember that the average annual capital gain over the past decade has been just 4.3% across the combined capital cities.”

The most significant turnaround in market conditions was in Brisbane where the monthly rate of growth jumped 1.5%.

“Brisbane’s housing market has been underperforming since [the] GFC,” Lawless said. “Home values are still almost 10% lower than their previous peak back in November 2009… potentially marking a positive turning point for Brisbane’s housing market.”

Lawless attributed the softer housing market conditions over August to a lower rate of growth in Sydney and Melbourne, where dwelling values rose 0.6% and 0.2% respectively.

Other cities recorded falls in values. Hobart saw the largest decline with a 1.2% fall. Perth values slipped 0.2%.

Posted by Dianne Deem