TP Data-Rismark reports improvement in Australian real estate prices that coincided with rate cuts made by the Reserve Bank, and experts feel the link between the two events is obvious. Prices are projected to increase 3% by the end of this year and by as much as 7% during next year. Perth and Adelaide enjoyed the largest increases while Darwin and Canberra saw marginal but significant monthly declines. Analysts believe that Australian market is poised for a recovery and could be further bolstered by buyer incentives and population growth. For more on this continue reading the following article from Property Wire.
Australian house prices are growing more steadily and are set to increase by as much as 3% this year and between 4% and 7% next year, according to experts.
The latest TP Data-Rismark home value index which covers eight key cities shows that in September prices increased by 1.4% from the previous month, the biggest increase for 30 months.
It also shows that on a quarterly basis prices have increased by 2% in the third quarter of the year. Tim Lawless, research director says the steady improvement in prices is down to interest rate cuts.
‘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. A 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,’ he explained.
Adelaide and Perth had the biggest monthly increase, with prices rising by 2.4% and 1.6% respectively. Darwin and Canberra had the biggest monthly declines, falling 2% and 0.6%.
The latest Australian Property Monitors house price report shows that prices remained stable in September with prices in Brisbane stabilising for the first time in two years. Sydney, Melbourne, Perth and Darwin all recorded house price growth in the first nine months of the year.
In Sydney prices have rise 1% year on year to an average of $641,890 but this is down from $644,191 in June 2012 and $646,012 in March. In Perth house prices are up 1.3% year on year to $537,267 but down on a quarterly basis from $539,823 in June. Darwin has seen prices rise 3% from $533,092 in September 2011 to $610,592 in September 2012.
Elsewhere prices have fallen on an annual basis. Prices in Hobart are down 4.7% from September 2011. In Brisbane prices are down 1.2%, Melbourne has seen prices fall 0.8% year on year, in Adelaide they are down 0.5% and in Canberra down 0.1%.
‘The national median house price remained steady over the September quarter providing encouragement that the increase in buyer activity evident in most capital city markets over 2012 is consolidating,’ said Andrew Wilson, senior economist with Australian Property Monitors.
‘Although buyer activity and prices growth appears to be generally consolidating, capital city markets and sub-markets continue to operate at different levels. Sydney and Perth median house prices retreated marginally over the quarter, however house prices for both these capitals remain higher than those recorded at the end of 2011,’ he explained.
He also pointed out that individual market outcomes remain mixed and patchy, with buyer and seller confidence fragile. ‘Housing market prospects for the remainder of 2012 will be dependant on the performance of local economies. Although falling interest rates have improved housing affordability and buyer confidence, market growth has been driven largely by other local factors, including changes to buyer incentives, population growth, and value-buying momentum in some prestige markets,’ he said.
‘Given a reasonable economic performance over the remainder of 2012, housing markets will continue to generally find their feet, albeit at varying levels of activity. Sydney, Perth, Darwin and Canberra are set to record increasing prices growth with Melbourne prices to remain relatively steady. The Brisbane market is poised for growth, particularly from rising inner suburban demand, however the recent increase in the unemployment rate could have an impact. In Adelaide, the market will likely track sideways, and there are no clear signals that sustained house prices growth is set to return to Hobart,’ he added.
This article was republished with permission from Property Wire.