Investors fill the first home buyer gap
Solid house price growth in the June quarter has been driven by robust demand for properties in Australia’s more affordable capital city suburbs, according to Australian Property Monitors’ Quarterly Housing Report.
Nationally, house price growth slowed to 2.4 per cent in this quarter, moderating in most capital cities, however annual house price growth is still charging ahead at over 15 per cent.
The lower end of the market outperformed the top end in nearly all major housing markets, the first time in over a year since this has been the case.
“Over the quarter we have seen increased investor activity mitigate the fall in demand from owner-occupiers, particularly the drop-off in first-home-buyers,” said Matthew Bell, Economist for Australia Property Monitors.
“However, the overall strong results in each market – with the exception of Brisbane – will certainly come as a surprise to many, given the six interest rate rises to May, and considering last year’s house price recovery post-GFC was driven by extraordinary growth in the top end of the market,” said Mr Bell.
Most markets around the country saw modest growth for the quarter, contributing to the continuing high year-on-year figures.
In what was the fifth consecutive quarter of house price rises for Sydney, house prices increased by just over two percent (2.3 per cent) and unit prices up by almost three per cent, pushing annual growth to over 13 per cent, well above the long-term trend.
The current Sydney median house price now sits above $625,000 and the median unit price above $435,000.
Melbourne was another star performer; despite quarterly growth falling to the lowest rate since March 2009, a result of over 4.4 per cent has meant that Melbourne is still a relatively hot market.
Canberra remains the second strongest housing market in the country with the annual rise in median house price coming in at over 16.5 per cent, with the median house price fast approaching $600,000.
Brisbane was the anomaly, achieving only 0.6 per cent growth in the quarter with annual house price growth of 7.3 per cent and unit price growth of 5.6 per cent – the lowest of all mainland capital cities.
“APM expects further price growth moderation in the next three to six months as the low levels of housing finance and the risk of further rate increases weigh on the market. However, the medium-to-long-term outlook for property prices remains strong, and we expect the 2010 annual rate of national house price growth to settle in the eight to 10 per cent range,” said Mr Bell.