The past month has shown Australia’s property price growth beginning to slow. Even so, Sydney’s median house price has recently broken the $800,000 barrier for the first time.
The latest RP Data-Rismark April hedonic home value index reveals dwelling values across Australia’s capital cities rose by just 0.3 per cent in April.
Tim Lawless of RP Data said the rate of growth in values had slowed in April, following strong increases in March and the first quarter of the year.
Values dropped in Melbourne by 0.5 per cent and Canberra by 1.1 per cent.
Other capital cities recorded growth in values, although the rates of growth were not as they had been previously.
Values went up 0.5 per cent in Sydney, 1.1 per cent in Brisbane and Darwin, 2.1 per cent in Adelaide, 0.2 per cent in Perth and Hobart.
Mr Lawless says the latest figures showed growth is now at a more sustainable rate.
He says this is reflected also in auction clearance rates which have been trending down the last four weeks from very high levels.
At the same time average selling time and vendor discounting rates have also flattened.
“It suggests to me that the market is still at a very strong place but probably right at peak growth,’’ he said.
“When you look at a market like Sydney I think that very high median price is quiet reflective also that we are seeing a lot of activity in the market place now and in Melbourne at the upper end of dwelling prices.
“We are seeing more activity across the premium market place, million dollar plus and less activity down the more affordable end as we are seeing first home buyers increasingly priced out of detached housing.’’
Mr Lawless says the latest figures reflect a slowing trend in price growth.
“We were always of a view that the capital gains we have seen in Australia’s two largest cities, Sydney and Melbourne, was unsustainable.
“The market does naturally slow down, that’s what has happened over each cycle, we will probably find as growth rates start to taper away, we will find the weaker performing cities may potentially start to pick up some pace.
“Brisbane is probably the obvious candidate there. Affordability is nowhere near as much an issue as it is in Sydney, yields are still very strong, population growth is strong, the labour market is relatively strong. I think that will probably be the market place that bucks the trend of a slowing market and starts to gather some pace.’’
Original article published at www.news.com.au by Michelle Hele, News Corp Australia, 1/5/2014