Property prices soared 3.7% during the September quarter, with new data showing that even the prestige market is now beginning to recover, according to Australian Property Monitors. The latest Quarterly House Prices Series report shows prices have increased by 7.1% during the 12 months to September, with the quarterly rise of 3.7% the highest in six years.
Melbourne recorded the largest quarterly rise for houses, rising 6.1% to a median price of $487,246, with a yearly rise of 11.4%. Units rose by 4.5% during the quarter, and 8.9% over the year, to a median of $368,138 with APM calling the city the “strongest market in the country”.
Sydney recorded a second consecutive quarter of median price growth above 3%, rising 3.6% to a median house price of $569,061. Units also grew by 3.6% to $400,819.
Brisbane house prices grew 1% during the quarter, but are still only up by 1.7% for the year, with the median price now $430,868. Units grew just 0.2% in the quarter to $351,253.
Adelaide houses recorded a second consecutive quarter of median price growth of 3.3% to $421,765, while units grew 0.6% during the quarter to $271,464, up by 3.9% over the year.
In Perth, prices have now grown consistently for three quarters with prices up 1.7% to $494,409. Units grew by 5% over the quarter to $361,810. In Hobart, prices also grew by 5.4% to $311,366 with units up 1.1% in the quarter to $215,251.
Canberra prices grew by 4.8% during the quarter to $511,820, with unit prices also growing 1.3% to $381,345. Darwin house prices remained flat during the quarter with a median price of $528,650, but are still up 10.5% for the year, while units grew a massive 11.9% during the quarter to $410,085.
Australian Property Monitors economist Matthew Bell says the results indicate the prestige property market is beginning to recover as first home buyer activity begins to fade.
“In Melbourne there wasn’t much of a big divergence because it has continued to grow, but in Sydney you see the top 30% of suburbs growing at nearly double the rate of the rest of the market. It is the prestige market above the $1 million properties that have been quite active.”
“I think what you’re seeing is that you had a really strong first home owner’s market throughout the first six months of this year, and now that’s backing away. Now the owners of prestige property have more money to upgrade, and are picking up bargains.”
But Bell says the good times may not last very long, as he expects this to be last quarter with any significant price gains as the first home owner’s grant phases out.
“I don’t think we can continue on with 3% or 4% growth each quarter. I think as we approach the levels we were at during late 2007, before the financial crisis began, I think the growth at the top end will mediate.”
“But that having been said I think the investors are coming back. It’s hard to translate the exact amount, but investment finance is increasing and there are definitely strong yields. Investors will be a big part of the market now.”