Australian house price data for the December quarter last year was released by the ABS earlier today, revealing that residential dwelling prices rose by a hefty 4.1%, leaving the increase on a year earlier at 7.7%.
The quarterly percentage increase was the largest since the June quarter of 2015.
Given the size of the gain, it saw the value of Australia’s 9.8 million residential dwellings increase by a mammoth $274.8 billion to $6.439 trillion, the highest level on record.
It also saw the average dwelling price jump by 4% to $657,000, again a record high.
However, using a national average is probably not all that appropriate given the vast disparity in housing market conditions across the country, particularly in recent years.
While prices nationally continue to increase, some individual markets are seeing values lift significantly faster. Some are also rising at a far smaller pace, and others are actually going backwards.
Nothing demonstrates that more than the chart below from the Commonwealth Bank.
It shows house price growth in Australia’s seven capital cities going back to 2002. These are for houses, not attached dwellings, and reflect the median, or middle price, for a detached house.
Just a slight disparity between the capitals.
According to the CBA, the Sydney median now stands at $970,000, nearly 50% more than second-placed Melbourne at $675,000. Canberra, Darwin, Perth, Brisbane, Adelaide and Hobart complete the list, sitting at $650,000, $525,000, $523,000, $515,000, $450,000 and $385,000 respectively.
Put another way, two median-valued houses in Adelaide, and nearly three in Hobart, buys one in Sydney.
And while prices in Darwin and Perth went backwards during the past quarter, Michael Workman, senior economist at the Commonwealth Bank, says prices nationally will continue to increase until there are some changes to the policy settings driving the spectrum of demand factors.
“Today’s RBA Board minutes have commentary on the housing market which adds to the concerns across the financial regulators,” he says.
“Some changes to lending guidelines cannot be ruled out.”