Australian capital city house prices resumed their uptrend in June, led by another surge in Sydney and Melbourne, with the CoreLogic RP data house price index rising by 2.0%. The result left combined capital city house prices 9.8% higher than June 2014.
The table below breaks down the monthly, quarterly and annual price performance. Sydney, unsurprisingly, recorded the strongest annual increase at 16.2%, leaving the median dwelling price at 772,200. Since May 2012, the median Sydney house price has surged by an impressive, and what some might deem to be “crazy”, 43.1%.
Tim Lawless, head of research at at CoreLogic RP Data, suggests interest rate cuts from the RBA in February and May are largely responsible for pushing prices higher.
“Growth conditions had been moderating from April last year through to the end of January 2015. With the RBA cutting the cash rate in February, there was an instant buyer reaction across the Sydney and Melbourne housing markets where auction clearance rates surged back to levels not seen since 2009, capital gains once again accelerated and we are now seeing Sydney and Melbourne homes selling in record time; Sydney homes are selling in just 26 days and Melbourne homes are selling in 32 days.”
Lawless believes there are currently three tiers of growth across the country, largely explained by economic and demographic factors.
“It’s no coincidence that New South Wales and Victoria are recording the strongest economic conditions coupled with the strongest rates of migration which is fuelling housing demand. These states are more sheltered from the mining sector downturn and have benefited from the strong multiplier effect of housing construction as well as a vibrant financial services sector.
The Perth and Darwin markets are weakening in line with the downturn in the resources sector and an associated weakening in infrastructure investment and a marked slowdown in migration. Brisbane, Adelaide, Canberra and Hobart are seeing softer economic conditions and population growth compared with Sydney and Melbourne, however housing markets have shown some level of growth over the year.”