Residential property prices in cities in Australia increased by 2.9% in the third quarter of 2016 and by 41.3% in the current cycle from June 2012, the latest index data shows.
Prices were also up 1% month on month but growth conditions vary considerably on a regional basis, according to the figures from the Corelogic home value index.
The top performing market was Melbourne where prices were up by 5% quarter on quarter with house values up by 5.2% and apartments up by 2.9%. Canberra showed the second highest rate of growth over the quarter with values up 4.5%, followed by Sydney at 3.5%.
In contrast, the weakest housing market over the quarter was Darwin where values declined by 4.5% and are now 11.1% lower than the most recent 2014 peak in property values and 13.9% lower than the previous 2010 peak in dwelling values.
Perth prices fell by 3.2% lower over the quarter to take the cumulative decline in values to 10.4% since their December 2014 peak and values are now 5.2% below the previous peak in 2010. Brisbane values also slipped lower over the quarter falling by a marginal 0.3%, attributable mostly to larger declines across the apartment sector.
The index report says that Darwin property prices are now roughly equivalent to what they were seven years ago, while in Perth values have retraced back to 2007 levels.
The combined regional markets of Australia, where the measure of value growth lags by one month, saw house values slip 1.1% lower over the three months to the end of August. While modest declines were recorded across most of the rest of state housing markets, the weakest conditions continue to be experienced in regional Western Australia, where house values have fallen 12.4% over the past 12 months.
The weak housing market conditions across the regional areas of Western Australia were also highlighted in the recent CoreLogic Pain and Gain report, which showed one third of houses which resold over the June quarter did so at gross loss.
While the headline rate of growth remains positive across most cities, the majority of capital cities have seen their growth trend moderate compared with a year ago. The only capital city markets where the current quarterly rate of growth was higher, compared with the September 2015 quarter, was Hobart, Canberra and Adelaide.
The quarterly pace of capital gains in Sydney peaked over the June quarter of 2015 at 7.4% and, similarly, Melbourne’s quarterly rate of capital gain peaked at 7.9% over the same quarter.
The report also says that although value growth in Sydney and Melbourne is not as strong as it was at its peak, growth continues to be supported by high auction clearance rates which are now at their strongest levels since the June 2015 quarter.
In Sydney, clerance rates remained above 80% throughout September, while Melbourne clearance rates have consistently been above 75%, albeit on substantially lower volumes than a year ago.
The top three auction markets for spring activity have been Inner Melbourne with 780 auctions over the four weeks of September with a clearance rate of 75%, Melbourne’s Inner South with 560 auctions with a clearance rate of 82% and North Sydney/Hornsby with 545 auctions with a clearance rate of 85%.
The most successful auction markets have been Sydney’s Eastern Suburbs where 89% of auctions were successful during September, Melbourne’s Mornington Peninsula where 88% of auctions cleared and Sydney’s Ryde with 87% of auctions cleared.
