Residential property prices in capital cities in Australia increased by 2.2% in the first three months of 2017, the fourth quarterly rise in a row, according to the latest figures to be published.
The data from the Australian Bureau of Statistics (ABS) also shows that year on year prices have increased by 10.2% and the growth was led by Sydney and Melbourne.
‘While residential property prices rose in most capital cities this quarter, Sydney and Melbourne continue to drive the national result,’ said ABS programme manager for prices Marcel van Kints.
A breakdown of the figures show that prices increased quarter on quarter by 3.1% in Melbourne and by 3% in Sydney but overall this was partially offset by prices falling by 1% in Perth and by 0.9% in Darwin.
Year on year Sydney recorded the largest growth of all capital cities at 14.4%, followed closely by Melbourne at 13.4%. Prices were up by 11.3% in Hobart, by 8.9% in Canberra, by 5% in Adelaide and by 3.5% in Brisbane but fell by 3.5% in Perth and by 5.9% in Darwin.
The data also shows that the total value of Australia’s 9.9 million residential dwellings increased $163.1 billion to $6.6 trillion, taking the mean price of a home to $669,700.
According to Shane Garrett, senior economist at the Housing Industry Association (HIA), the variation in dwelling price growth across the country is significant and house price developments in other markets are much weaker.
‘This situation underlines the dangers of applying one size fits all policy remedies to the challenges in Australia’s housing market. There is evidence that since March 2017 dwelling price growth has slowed following the introduction of additional restrictions by APRA and increased barriers to foreign investor participation imposed at federal and state level,’ he said.
‘The solution to Australia’s considerable housing affordability challenge ultimately lies in delivering a sufficient supply of new dwelling stock in a more cost effective manner. We are concerned that some recent policy changes could undermine this objective,’ he added.
