Softer September quarter signals end of southeast’s boom
Posted on Thursday, October 22 2015 at 9:55 AM
Property portal Domain.com.au claims recent price growth results confirm property activity is slowing in the nation’s hottest markets, leading them to claim that the “boom is over”.
Domain says its September Quarter House Price Report reveals a sharp decline in the rate of price growth in both Sydney and Melbourne, with more moderate softening in other capitals.
According to Domain, the general outlook for housing markets across Australia is moderate to modest growth over the remainder of 2015 and into 2016.
Dr Andrew Wilson, senior economist at Domain, says low interest rates are losing their impact in driving Sydney and Melbourne.
“With rates steady over five consecutive months and income growth remaining subdued, the capacity for house price increases is moderating.
“Local factors continue to drive capital city house price growth, with resource states – Queensland, Western Australia and the Northern Territory – the clear underperformers as a consequence of weakening economies,” he says.
Domain’s findings on a city-by-city basis are:
Sydney
The great Sydney house price boom has ended, with house price growth tracking back sharply over the September quarter.
While the median house price still grew 3.2 per cent in the quarter to reach $1,032,433, this was the lowest quarterly rate of growth reported since March 2014.
“The extraordinary house price growth Sydney has recorded over the last three years is now clearly receding, although price growth remains relatively strong and well ahead of all other capitals, except Melbourne,” Wilson says.
“Sydney’s house prices have increased by a remarkable 21.7 per cent over the year ending September.”
Melbourne
The report shows Melbourne’s median house price increased by 2.8 per cent over the September quarter to reach $707,415.
While a strong result, Melbourne’s house price growth was well below the six per cent recorded in the previous June quarter.
“Despite the retreat in the rate of house price growth over the September quarter, Melbourne’s median house price increased by 15.6 per cent over the year, which was the highest annual result recorded since June 2010.”
Brisbane
Brisbane’s housing market reported another modest result for house price growth over the September quarter, with the median price increasing by just 0.8 per cent to $497,143.
Brisbane unit prices fell by 0.6 per cent during the period to $362,737, a drop year-on-year of 5.6 per cent.
“This was the fifth consecutive quarter of falling unit prices in Brisbane. With high levels of new apartment construction entering the market over the past year, supply has pushed well ahead of demand.”
Adelaide
Adelaide’s housing market remained flat, with the median figure increasing 0.3 per cent to record a figure of $485,873.
“Despite a subdued September quarter of growth, Adelaide’s house prices are still likely to increase at a faster rate this year than the 3.3 per cent recorded over 2014.”
Perth
Perth housing continued to decline over the September quarter, recording its sharpest fall in house prices since June 2011 – a drop of 2.4 per cent to $589,100.
“Perth house prices have now fallen by 3.2 per cent over the past year, with only Darwin recording a lower rate of annual house price growth. The sharp deterioration in the local economy and significant increases in jobless numbers has affected buyer and seller confidence,” Wilson says.
Hobart
Hobart’s median house price of $346,360 reflects a marginal increase of 0.9 per cent over the September quarter.
“Despite the modest increase in house prices over the quarter, strong growth earlier in the year has Hobart’s house prices up by 6.5 per cent year-on-year and are on track to increase over 2015 at a significantly higher rate than the 1.3 per cent recorded last year.”
Canberra
Median house prices in Canberra have reached $625,092 after rising 2.3 per cent during the quarter.
Domain says house prices have now increased by 7.8 per cent over the past year, representing a rate of growth behind only Sydney and Melbourne of all the Australian capitals.
“Canberra’s annual house price growth rate is the highest recorded by the local market since September 2010, with prices growth this year set to clearly exceed the 3.1 per cent recorded over 2014.
“The strong result recorded by the Canberra housing market over the September quarter is reflective of rising buyer confidence, which has been restored after a subdued period of buyer activity.”
Darwin
Darwin’s median house price fell by 2.3 per cent during the quarter and now sits at $639,042.
“The Darwin median house price has fallen by 5.1 per cent over the past year, which reflects reduced demand from interstate job seekers and an associated weakening of local economic activity,” Wilson says.
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