Property owners, take heart – the early signs of a recovery in the market are beginning to become even clearer, with new RP Data figures showing prices rose by 1.4% in September.
The good news comes after recent auction figures in both Melbourne and Sydney have shown promising signs of a spring recovery.
According to the latest RP Data figures, capital city prices rose by 1.4% in September, which is the largest monthly increase since March 2010.
The best results were in Adelaide, which was up 2.4%, followed by Perth at 1.6%, Sydney at 1.5% and Melbourne at 1.4%. Brisbane prices rose by 1.1% as well.
On a quarterly basis, prices rose by 2% – this is the highest quarterly result since the three months to May 2010. All capital cities recorded increases, except for Hobart and Perth.
The biggest rise was in Darwin, which gained 3.9%. Prices rose in Melbourne by 3%, by 2.8% in Sydney, but 1.2% in Adelaide, by 0.1% in Canberra and in Brisbane by 0.8%.
Over the past year, the biggest increase has been In Darwin, up 2.9%, although over the past year prices are still down 1.2%.
But RP Data research director Tim Lawless says the improved conditions can be attributed to the current environment of low interest rates – and with an expected move from the Reserve Bank of Australia today, that performance could improve even more.
“It’s no coincidence that housing market conditions bottomed out at the end of May, after the Reserve Bank cut the official cash rate by 50 basis points,” Lawless said.
“The further cut of 25 basis points in June and the anticipation of further rate cuts in the pipeline appear to have instilled renewed confidence in the housing market, which has driven the growth in home values.”
The strength in the market will come up in today’s meeting, he said, particularly Melbourne’s strong prices.
Although home values in Melbourne have fallen by 10.5% between October 2010 and May 2012, they have since risen by 4% – the largest recovery in the country.
Rismark chief executive Ben Skilbeck said if estimates take season into account, “capital city listings are now lower than at the same time last year, and vendors are discounting their asking prices by a lesser amount”.