House prices up over 3 per cent in June quarter
July 30, 2009
A new report has shown house prices rising again in the June quarter, consolidating and building on gains made in the March quarter.
The Australian Property Monitors report suggested house prices had risen by 3.3 per cent nationally, with the two largest markets of Melbourne and Sydney leading the way. Over the full year to June 2009, house prices had fallen by 0.1%, with Brisbane and Perth failing to recoup declines in the second half of last year.
“The national housing market has experienced its strongest quarterly growth in both house and unit prices since the global financial crisis took hold late in 2007,” Matthew Bell, Economist for Australian Property Monitors, noted. “The consolidation that began in the March 2009 quarter has now transformed into strong growth across the country.”
The report found it was the upper end of the market driving the gains, in a sign of renewed investor interest. It also signalled that the more ‘affordable’ suburbs were starting to stagnate after strong gains on the back of the First Home Owners Boost.
“For Sydney, Melbourne and Brisbane, median prices in the top 50% of suburbs grew by nearly double the rate of those of the bottom 50% in the June quarter,” Mr Bell said. “Not surprisingly this has coincided with the stock-market rebounding by nearly 30% from its March lows and the economic outlook improving as better-than-expected data flowed in.”
“As the First Home Owner Boost begins phasing out in September, demand is expected to remain strong as potential buyers point to low interest rates and previous periods of flat or falling prices as
important drivers in their decision to purchase a property within the next 12 months,” he added. “Property investors who have been waiting for the removal of the Boost and the bottom of the interest rate cycle are expected to begin re-entering the market in greater numbers in the second half of 2009 and early 2010.”
Rising unemployment and a further threat to global economic stability remained the main threats to the market.
A city-by-city analysis:
Sydney
· House prices grew strongly in the June quarter with the median price rising 3.7%. This almost brings house prices back to the level of June 2008 (-0.3%).
· Unit prices rose by 2.6% in the June quarter and are up 3.4% in the 12-months since June 2008.
Melbourne
· The strongest housing market outside of Darwin, recording a 5.8% rise in median house price for the June quarter, leaving prices up 4.1% for the 12 months to June 2009.
· Unit median prices recorded the first significant growth since December 2007, rising 2.8% to $345,000.
Brisbane
· House prices rose by 1.7% in the June quarter, but prices are still down 4.5% for the 12-months to June. This annual fall now exceeds Perth to be the heaviest amongst capital cities.
· Unit prices were flat in the June quarter, and remain at similar levels to those seen 12 months ago (-0.8%).
Adelaide
· A weak March quarter was offset by a 2% gain in house prices. For the year, prices rose 0.5%.
· Unit prices rose 3 per cent in the quarter, and 2.4% for the year.
Canberra
· In the June quarter, Canberra house prices rose by 2.4% but were still down 0.7% for the year.
· Unit prices were up 2.2% in the three months to June and 2.3% on June 2008.
Perth
· House prices fell 0.8% in the June quarter, to be down 4.4% for the 12-months to June 2009.
· Unit prices rose for the second consecutive quarter, however, up 0.6%, continuing to arrest the slide experienced in the second half of 2008. They were still down 6.7% year-on-year.
Hobart
· House prices rose very strongly to be up 7.0% over the quarter, making June the only quarter of significant growth since December 2007. This ensured a 6.9% rise over the full year.
· Hobart unit prices rose by 3.3% in the June quarter, making it the strongest unit market over 12 months outside Darwin.
Darwin
· Remaining the strongest overall market in the country, house prices rose by 11.2% in the quarter, producing a 12-month rise of 17.3%.
· Units finally took a breather falling 1.4% in the June quarter to $375,000, but the 12 month price change still hovers around 20%.