The property market is set for a perfect spring season of sales, with reduced stock and values continuing to climb at a more sustainable rate, new figures show.
The latest RP Data–Rismark Home Value Index shows that capital city dwelling values rose a further 0.5 per cent in August taking the cumulative recovery in residential home values to 7.0 per cent since May last year.
The August result is a slowdown from previous months where capital gains were recorded at a much higher rate, at 1.6 per cent over July and 1.9 per cent over June.
According to RP Data research director Tim Lawless, the slower month-on-month result is a welcome sign after the strong growth conditions of previous months fuelled renewed debate around the sustainability of Australian dwelling values.
“The half per cent gain over the month of August is a much more sustainable rate of growth”, Lawless said.
“While the recent surge in dwelling values has caused some renewed debate about an Australian housing bubble, it is important to remember that the average annual capital gain over the past decade has been just 4.3 per cent across the combined capital cities.
The softer housing market conditions over August can be attributed mostly to a lower rate of growth across the Sydney and Melbourne housing markets where dwelling values rose by 0.6 per cent and 0.2 per cent respectively.
Several cities recorded a fall in values over the month, with Hobart seeing the largest decline with a 1.2 per cent fall and Perth values slipping by 0.2 per cent.
According to Mr Lawless, the most significant turnaround in market conditions can be found in Brisbane where the monthly rate of growth jumped to 1.5 per cent.
“Brisbane’s housing market has been underperforming since the onset of the GFC with home values still almost 10 per cent lower than their previous peak which was back in November 2009”, he said.
“The strong result for August was evident across both the detached housing and the unit markets and may potentially mark a positive turning point for Brisbane’s housing market.”
RP Data’s research also shows the broad middle of the market to be the best performing, although the rate of capital gain is gathering some momentum at the more prestigious end of the market.
The broad mid-priced market has recorded a capital gain of 5.2 per cent since the start of the year, while values have increased by 4.9 per cent in the most expensive quartile and by 4.4 per cent in the most affordable sector.
Mr Lawless commented that the spring season this year is likely to show strong housing market conditions.
“Housing market conditions are looking set to provide what could be described as a near-to perfect spring season with the number of homes currently available for sale around 15 per cent lower than a year ago.
“We are already seeing a substantial increase in real estate agent activity across the RP Data platforms which indicate a surge in pre-listings activity,” he added.