RP Data reports that property values in Australia’s capital cities are on the rise. The Rismark Combined Capital City Index increased 1.6% in September, carrying the number 0.7% higher than the previous record set in October 2010. Melbourne and Sydney are driving the value increase, while all other capital city property values save for those in Adelaide dropped by marginal amounts in the same month. Annual performance for most of these capitals reflects an overall gain, however, which analysts say will have an impact on the ongoing debate among policymakers regarding sustainable growth. For more on this continue reading the following article from Property Wire.
Property values in capital cities in Australia increased by 1.6% in September taking the combined capitals index to a new record high driven by strong gains in Sydney and Melbourne.
The RP Data and Rismark International index shows that residential property values in these two cities were up by more than 2% over the month.
RP Data research director and analyst Tim Lawless said there has been a ‘technical’ recovery in the housing market with the RP Data – Rismark Combined Capital City Index moving 0.7% higher than the previous record high in October 2010.
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
- Funds are available to U.S. Businesses NOW
- This is not a loan. These tax credits do not need to be repaid
Based on the combined capitals index, capital city dwelling values fell by 7.4% from the October 2010 market peak to the May 2012 trough. Since the beginning of June 2012, capital city dwelling values have increased by 8.7% through to the end of September 2013.
Sydney home values were 2.5% higher over the month and are up 5.2% over the September quarter while Melbourne values have seen a similar 2.4% month on month gain and a 5% quarterly lift. ‘We haven’t seen market conditions this strong since April 2009 for Sydney and May 2010 for Melbourne,’ Lawless said.
While Sydney and Melbourne dwelling values powered higher in September, most other capital cities are recording much more subdued housing market conditions. Dwelling values moved lower in Brisbane with a fall of 0.3%, were down 0.1% in Perth, down 2% in Hobart, down 2.5% in Darwin, down 0.7% in Canberra but up 1.1% in Adelaide.
According to Lawless the latest housing market data is likely to be closely scrutinized by policy makers. ‘Any debate about unsustainable growth in housing markets should be very much focused on Sydney and Melbourne. Most other capital city housing markets are in fact showing only a modest growth trend. Perth’s housing market, which was previously the stand out for capital gains, has seen dwelling values rise by just 1.3% over the September quarter while Brisbane’s housing market remains sluggish, with values up only 1.1% over the past 12 months,’ he explained.
He pointed out that another important factor to note when considering the current rate of capital gains is to look at the longer history of capital gains. ‘Sydney dwelling values have appreciated by just 2.5% per annum over the past decade which is less than annual rates of inflation and wages growth over this period. Sydney’s annual average rate of capital gain over the past ten years is actually the lowest of any capital city,’ he said.
This article was republished with permission from Property Wire.