Australian property prices rose another 1% in October, according to the RP Data CoreLogic Home Value Index.
The more important news, however, is that the rate of growth is narrowing with only Sydney, Melbourne and Brisbane reporting price rises on a one-month basis and only Adelaide joining the price rise club on a three-month basis.
Tim Lawless from RP Data said: “Looking at the increase in home values over the 12 months to October, it is clear that the rate of capital growth is continuing to moderate. Despite the annual rate of value growth slowing, all capital cities have still recorded an increase in home values over the past year.”
The moderation in house price growth will be welcomed by the RBA and APRA (Australian Prudential Regulation Authority).
But, the absolute level of price appreciation in Sydney from the previous peak (23.3%) and from the previous cycle trough (29.8%) shows how far and particularly how fast Sydney property has risen in the past couple of years.
The 10 year changes are more moderate but that is essentially the point that the RBA and the ANZ’s CEO of Australian operations, Phil Chronican, are making when they warn against buyers extrapolating recent rises into the future.
Prices caught up after a stagnation are no doubt are dragging forward some returns from the future. That’s what Chronican and RBA Governor Glenn Stevens mean when they warn about the future.