Sydney remains Australia’s most expensive city to buy a property, but across Australia the average dwelling value failed to grow in February after an eight-month run that saw it rise 10%.
New figures from RP Data show only Sydney, Hobart and Darwin recorded average dwelling value growth, while the other capital cities declined slightly on the previous month.
RP Data head of research Tim Lawless says the February market results are in “stark contrast” to earlier readings where capital city dwelling values moved 2.6% higher over the past three months.
“The likelihood is that the weak reading for February is an adjustment from the strong readings in December and January rather than the beginning of a flat to negative growth phase across the macro level housing market,” he said.
The data found that buyer demand remained very strong in February, with it proving a record month for average daily levels of mortgage-related activity.
It also found that auction clearance rates remained solid, with little slippage in vendor discounting levels or average selling times.
The data showed Sydney was the most expensive city to buy a dwelling, with the median dwelling price at $610,000. The most affordable capital city was Hobart with a median dwelling price of $325,500.
Broken into categories, Sydney houses were the most expensive on average, at $700,000, while in Melbourne the average house price was $550,000.
The average price of a Sydney unit was $530,800, and for Melbourne it was $445,000. The cheapest unit prices were in Brisbane, averaging at $387,000.
For people with rental properties, the city with the highest rental yields was Darwin, with Darwin houses at a gross rental yield of 6.1% and Darwin units at an average yield of 6%. Melbourne had the lowest rental yield, with houses averaging at 3.4% and units at 4.2%.
Lawless said it would take more months of flat to negative movement before it could be said the housing market was slowing down.
“Our view is that housing market conditions will start to wind down later this year as affordability constraints and low rental yields dampen market conditions,” he said.
“Additionally, with a belief that mortgage rates are likely to start tightening later this year, it may help to quell some of the exuberance we have been seeing.”
Australian Property Monitors senior economist Andrew Wilson told SmartCompany earlier this week that Sydney auctions in February showed no respite, and in the first weekend of March it had showed no sign of abating.
He said Melbourne’s property market was “solid rather than strong.”
“Buyer and seller confidence in Melbourne’s auction market remains solid with no sign of a waning in activity despite ongoing concerns over the performance of the local economy”.
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