Capital cities property markets rebound in Australia

The residential property market in Australia bounced back in 2012 with the median house price rising by 2.1%, according to the latest report from Australian Property Monitors (APM). Prices increased in capital cities in all states in the last quarter of the year, led by Hobart at 4.7%, followed by Darwin at 2.7%, Perth at 2.5%, Melbourne at 2.4%, Canberra at 2.1%, Sydney at 2%, Adelaide at 0.8% and Brisbane at 0.3%.

For Brisbane it was the first growth after months of price falls and the city ended the year with prices down 0.5%. Adelaide was also in negative territory with prices down 0.6% although overall during the year Perth was the strongest housing market with prices up 6.1% year on year.

Home buyers pushed the Sydney median house price over $650,000 for the first time to a record $656,415 over the December quarter. The firm said that Sydney has again clearly illustrated the resilience of its housing market with house prices rising by 3.4% over 2012. All other capitals cities remain below their previous median house price peaks although on current trends Perth, Canberra and Darwin can be expected to achieve their record house prices sometime in 2013.

Apartments performed well in 2012 with the national median unit price rising by 2.1% led by Sydney with an increase of 5.6% to a record $475,314 over the December quarter. Melbourne recorded its first quarterly rise in median unit prices for two years, up by 1% but prices remain 2.2% down over the year. In Brisbane unit prices weakened over the December quarter falling by 2.7% and were down 3.2% over the year. Perth unit prices rose by 3.4% over the quarter to be up by 6% year on year.

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The data shows that Sydney remains the most expensive of all the state capitals for both houses and units with Adelaide continuing to just edge out Brisbane as the most affordable of the mainland capitals at $432,309 for houses. ‘With confidence in capital city housing markets generally restored, buyer activity is set to continue to rise through 2013. Although local factors still predominate housing markets, the general improvement to affordability and confidence as a consequence of record low interest rates will fuel increased buyer activity and confidence,’ said Andrew Wilson, senior economist at APM.

‘As has been the case in 2012 activity will, however, remain mixed and patchy both between capital city markets and sub-markets. Much will depend on the direction of local economies as it is no coincidence that the better performing housing markets in 2012 reflected better performing economies, particularly in regard to unemployment levels,’ he explained. ‘With a rising stock market and an improving international outlook, the general economic landscape and prospects remain optimistic which is unequivocal good news for Australia’s recovering housing markets,’ he added.