The Australian property market is firing on all cylinders as RP Data figures confirm that current conditions in Melbourne and Sydney have not been this strong in years.
The data provider’s September results show that significant movement in Australia’s two biggest markets has been responsible for a 1.6% rise in its combined capital cities index over the month.
Such a high level of national activity was last recorded back in October 2010.
Residential values in both Sydney and Melbourne were up by more than 2% over September. The former saw values jump 2.5% over the month and 5.2% over the three months prior. The latter saw a month-on-month value gain of 2.4%, with a 5% quarterly lift.
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“We haven't seen market conditions this strong since April 2009 for Sydney and May 2010 for Melbourne,” RP Data research analyst Tim Lawless said.
Lawless described the property price movements as a ‘technical’ recovery in the housing market, and could prompt discussion among policy makers.
“Any debate about unsustainable growth in housing markets should be very much focussed on Sydney and Melbourne. Most other capital city housing markets are in fact showing only a modest growth trend,” he said.
Outside of Australia’s two biggest cities, other capital cities recorded more subdued housing market conditions. Dwelling values moved lower in Brisbane (-0.3%), Perth (-0.1%), Hobart (-2.0%), Darwin (-2.5%) and Canberra (-0.7%), while Adelaide values posted a 1.1% capital gain over the month.
For Perth and Brisbane, these results mirror a longer term trend.
Perth, which had previously been the stand out for capital gains, has seen dwelling values rise by just 1.3% over the three months to September. Brisbane’s property price growth has been equally flat, with values up just 1.1% over the past 12 months.
Lawless added that impressive capital gains in Sydney should be measured against the backdrop of city-wide price growth over the last 10 years.
“Sydney dwelling values have appreciated by just 2.5% per annum over the past decade which is less than annual rates of inflation and wages growth over this period. Sydney’s annual average rate of capital gain over the past 10 years is actually the lowest of any capital city.”
From June 2012 through to September 2013, combined capital city dwelling values have increased by 8.7%.
