House prices in Sydney have risen by a staggering 95.7% since the GFC

Photo: George Rose/ Getty Images.

Australian capital city house prices continued to ratchet higher in October, according to new research from CoreLogic on Tuesday.

Nationally, the group’s Home Value Index rose by 0.5% last month, taking the gain from a year earlier to 7.5%.

While yet another increase, the pace was down on the 1.1% and 1.0% gains seen in the previous two months.

This table from CoreLogic breaks down the price performance by individual capital city, looking not only on the change seen in October but also over the past quarter and year.

For October, Darwin registered the largest increase of all Australian capitals, logging an impressive gain of 2.2% in the median dwelling price .

It was followed by Melbourne, Brisbane and Perth which saw prices rise by 0.8% apiece.

Sydney, the country’s largest and most expensive housing market, registered a gain of 0.6%, leaving the median dwelling price at exactly $800,000, the highest level on record.

The gains in October left the national increase for the quarter at a hefty 2.7%, a period that corresponds with the RBA’s last rate cut that was delivered on August 2.

Over that period, prices in Melbourne, Darwin and Canberra all logged gains in excess of 4%.

Apart from Adelaide (-1.3%) and Perth (-1.5%), every capital city recorded a rise in dwelling values over the past three months, with the Canberra housing market recording the largest increase in values after a 5.6% quarterly rise, said Tim Lawless, research director at CoreLogic.

Big moves, and ones that could potentially have ramifications for the RBA as it sits down to discuss November’s monetary policy decision which will be released at 2.30pm AEDT today.

Over the past 12 months, Sydney retained the title as the hottest housing market in the country with prices jumping by 10.6%.

The juggernaut rolls on.

That was closely followed by Melbourne, the second-largest and second most expensive city in the country, which saw the median dwelling price rise by 9.1%.

Elsewhere, prices rose by between 2.5% to 7.9% in Brisbane, Adelaide, Hobart and Canberra.

Perth and Darwin, the capitals most exposed to the fortunes of the mining sector, registered declines of 3.7% and 3.8% respectively over the same period.

Lawless says that “strong housing market growth results is continuing to occur on a back drop of low stock levels and low transactional activity”.

“Low stock levels tend to create a higher level of urgency in the housing market as buyers compete with each other and vendors are less willing to negotiate on prices. This may be one reason why transaction numbers have reduced over the year,” he said.

While price growth has moderated somewhat this year, the slowdown has to be put into perspective, particularly considering the scale of the gains seen in past years in Sydney, and to a lesser degree, Melbourne.

That’s exactly what this chart from CoreLogic does, looking at the nominal change in the median capital city house price since the global financial crisis.

Prices in Sydney have near-doubled, jumping by 95.7%, while those in Melbourne have increased by an equally impressive, and somewhat alarming, 81.8%.

Outside of Canberra which has seen prices rise by 33.2% over the same period, prices in most other capitals have risen in line, or below, the pace of inflation.

It’s easy to see why the debate over housing affordability in Australia, primarily centred around Sydney and Melbourne, isn’t likely to go away anytime soon.

Paying a mortgage with record-low interest rates isn’t overly taxing right now compared to previous periods. However, saving for a deposit to enter the market is, particularly with prices in many cities advancing far quicker than income levels and inflation.

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