Cities that were left out of last year’s property boom – Canberra, Darwin, Brisbane – could take over and produce another 10 percent national average price growth year, business commentator Alan Kohler has suggested.
“Despite all the complaints that Australian house prices are too high for first home buyers, or just too high full stop, the potential is clearly there for more rises in 2014,” he wrote on the News Ltd website, Business Spectator.
“Interest rates are going nowhere (neither up nor down, probably for 12 months), incomes and wealth are rising and the emergence of strong investment buying from self-managed super funds and Chinese cash exporters looks to have only just begun.”
He noted 2013 was the first year of solid gains after three years of flat prices.
“In fact prices have only been rising for nine months, and mainly in Sydney, which saw an extraordinary 15 per cent rise in the median house price between March and December.
“That sort of pace in Sydney probably won’t continue (it slowed to an annual rate of 9.6 percent in December) but other cities that were left out of last year’s boom (Canberra, Darwin, Brisbane) could take over and produce another 10 percent year for the national average,” he anticipated.
Across the combined capital cities, home values increased by 9.8 percent over the 2013 calendar year, according to RP Data.
Rp Data noted this was the fastest annual rate of value growth since August 2010, and the largest calendar year increase in values since 2009 when home values were up by 13.7 percent.
House value growth at 9.9 percent slightly outpaced the overall increase in unit values at 9.0 percent.
Each capital city housing market recorded positive home value growth in 2013, however, the city driving the capital growth was Sydney (14.5 percent), then Perth (9.9 percent) and Melbourne (8.5 percent).
Brisbane’s growth was 5.1 percent. There was 3.5 percent price growth in Canberra; 3.3 percent growth in Darwin; 2.8 percent growth in Adelaide with Hobart the weakest at 2.2 percent annual price growth during 2013.
“Despite the strongest annual value growth since 2009, the rate of growth was not that startling given the low interest rate environment and the previous successive years in which home values fell,” according to RP Data analyst Cameron Kusher.
“Although home values increased by 9.8 percent in 2013 the growth follows a -3.8 percent annual fall in values in 2011 and a further -0.4 percent annual fall in 2012. Cumulatively, from peak to trough, capital city dwelling values were down 7.7 percent prior to this current growth cycle,” Mr Kusher said.
This article first appeared on Property Observer.