The latest RP Hedonic Home Value Index data shows that Australia’s capital city dwelling values during winter moved 4.2% higher over the three months to the end of August.
This is the strongest capital gain over the three months of winter since 2007.
The top performer in dwelling values for this quarter was Melbourne out of all the Australian Capital Cities. Dwelling values were up 6.4% with a median dwelling price of $523,750 for August.
Sydney came in second recording 5.0% albeit on a monthly basis Sydney had the greatest dwelling increase with a 1.8% rise, and Melbourne saw an 0.8% rise.
The other capital cities overall had a modest winter recording the following: Canberra (2.5%), Adelaide (1.5%), Brisbane (1.3%) and Perth (1%).
Overall for the past 12 months dwelling values saw a 10.9% increase across the capitals, and only Melbourne and Sydney recorded double digit price growth.
Melbourne and Sydney’s housing markets are responsible for the “two tier” market conditions, according to RP Data Research director Tim Lawless.
Over the latest growth cycle the market has seen Sydney dwelling values increase by 27% and Melbourne values up by 19.5%.
Sydney and Melbourne have also been the strongest performing cities during the 2009/10 growth cycle. Since the beginning of 2009, values have risen by a cumulative 50.1% and 46.1% respectively in Sydney and Melbourne.
But can this growth continue to be sustainable?
As we move into Spring, it is expected that listing numbers to rise which will provide a real test for the housing market.
There is continued high rate of auction clearing rates and generally rapid rate of sale which is supported by the ongoing low interest rate environment.
Predictions are that home prices are likely to continue to increase in the next quarter.
Post-budget consumer confidence is also moving in the right direction which will add fuel to the boisterous buying and selling conditions that have been experienced during winter.