Sydney house prices have doubled in just 8 years

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Australian capital city house prices ripped higher in 2016, rising by a weighted average of more than 10%.

And there’s no sign those gains are slowing down in if the latest Home Value Index from CoreLogic is anything to go by.

Prices surged again in January, with all state and territory capitals, aside from Darwin, recording increases from a month earlier.

Source: CoreLogic

The continued gains will almost certainly see the debate over housing affordability in these cities go up a notch or two.

The median dwelling price in Sydney now stands at $850,000, more than $200,000 more than second-placed Melbourne at $640,000.

They’ve now increased by 99.4% in Sydney since the start of 2009, and by 85% in Melbourne.

According to CoreLogic, prices rose by a combined 0.7% last month, leaving the change on a year earlier at 10.7%.

And, yet again, the standout performances came from Australia’s largest and most expensive housing markets, Sydney and Melbourne.

Prices in Sydney jumped by 1% in January, leaving the median price up an astonishing — to some alarming — 16% from 12 months earlier. It was the fastest annual increase since September 2015, a period that just happened to coincide with surging investor activity in the property market.

Melbourne prices rose by a smaller 0.8%, taking the gain over the past year to 11.8%.

Source: CoreLogic

Elsewhere, Hobart recorded the largest increase in the median dwelling price in January, rising by 1.4% leaving the annual increase at 5.8%.

Prices also increased by between 0.1% to 0.5% in Adelaide, Brisbane, Perth and Canberra.

Darwin, at -1.7%, was the only capital to record a decline from a month earlier, although prices in the city still rose by 1.8% for the quarter.

While January is typically a slow month for housing market turnover, the trends seen in last month appear to be a continuation of a previous theme, with price growth in Sydney and Melbourne outpacing gains in other parts of the country.

It also fits with recent strength in Australian housing finance data, along with new home sales.

In December, the RBA said that investor housing credit jumped by 0.8%, the largest monthly increase since June 2015. That followed data from the ABS which revealed investor housing finance jumped by 4.9% to $13.269 billion in November, also the largest increase seen since June 2015.

Lending to investors has has now increased in six of the past seven months, with the November figure up 21.4% on the level of a year earlier.

New home sales have also remained resilient, increasing by 6.1% in November according to data from Australia’s Housing Industry Association (HIA).