Australia's housing market is now valued at $6.8 trillion

Chris Hopkins/Getty Images

Australian house prices fell in half of Australia’s capital cities in the September quarter, according to data released by the Australian Bureau of Statistics (ABS) today.

The Bureau’s Residential Property Price Index (RPPI) — a weighted average of price movements across Australia’s capitals — fell by 0.2% during the quarter, led by a 1.4% drop in Sydney, the nation’s largest and most expensive housing market.

“The fall in Sydney property prices this quarter was consistent with market indicators,” said Bruce Hockman, Chief Economist for the ABS.

It was the largest quarterly decline since the final three months of 2015, coinciding with the introduction of limits on annual investor credit growth introduced by APRA in late 2015.

Falls were also recorded in Perth (-1.0%), Darwin (-2.6%) and Canberra (-0.2%) over the quarter, offsetting increases in Melbourne, Brisbane, Adelaide and Hobart of 1.1%, 0.7%, 0.7% and 3.4% respectively.

As a result of the national decline, the first recorded since the first quarter of 2016, annual price growth slowed to 8.3%, down from 10.2% in the three months to June.

However, as seen in the table below from the ABS, that national slowdown masked a widely divergent performance across Australia’s capital cities, both over the quarter and year.

Source: ABS

At 13.8%, annual price growth in Hobart was the fastest of any capital over the year, assuming the mantle held jointly by Sydney and Melbourne in the prior quarter.

At the other end of the spectrum, prices in Australia’s mining capitals — Perth and Darwin — continued to decline, falling by 2.4% and 6.3% respectively from 12 months earlier.

On an annualised basis, prices have fallen for 11 straight quarters in both cities.

This next table shows the quarterly change in prices by type of dwelling. The House Price Index, or HPI, measures changes in house prices while the Attached Dwelling Price Index, or ADPI tracks changes in higher-density housing.

Source: ABS

“In the September quarter 2017 the HPI was flat (0.0%) and the ADPI fell 0.8%,” the ABS said. “Through the year to the September quarter 2017, the HPI rose 9.3% and the ADPI rose 5.1%.”

So house prices continue to outperform other types of dwellings, partially reflecting the steep increase in supply of apartments as result of Australia’s record-breaking high-rise construction boom of recent years.

For houses, Melbourne, at 15.5%, logged the fastest annual increase across the country, topping growth rates of 13.1% in Hobart and 10% in Sydney over the same period.

Of the remaining capitals, prices increased by 8.3% in Canberra, 4.6% in Adelaide and 4.2% in Brisbane. Prices fell by 1.8% and 5% in Perth and Darwin over the year.

For attached dwellings, Hobart, at 18%, recorded the fastest annual increase of any capital city. Prices in Sydney, Melbourne, Adelaide and Adelaide also increased over the year, lifting 7.8%, 4.5%, 5.7% and 1.8% respectively.

Elsewhere, prices fell by 0.4% in Brisbane, 5.3% in Perth and 8.9% in Darwin over the same period.

Despite the decline in prices during the quarter, a larger amount of housing stock as a result of recent strength in construction saw the value of Australia’s housing market lift to $6.779 trillion. Just six years ago, that figure stood at $4.4189 trillion, representing an increase of 53%.

The ABS said are currently 9.954 million residential dwellings in Australia, equating to a mean national price of $681,000.

Obviously this figure does not portray an accurate picture on prices in individual cities, especially in Sydney and, to a lesser degree, Melbourne.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.