Sydney and Melbourne lead property price growth in Australia, official figures show

Sydney and Melbourne lead property price growth in Australia, official figures show

Residential property prices in Australia increased by 4.1% in the final quarter of 2016, the strongest quarterly growth recorded since June 2015, according to latest official figures to be published.

Melbourne recorded the largest increased through the year of all capital cities with a rise of 10.8% followed closely by Sydney with a rise of 10.3%, the data from the Australian Bureau of Statistics shows.

Sydney and Melbourne also recorded the strongest quarterly growth with values up 6.1% and 6% respectively in the fourth quarter of 2016, fuelling concerns that rising prices are creating affordability issues in these two cities.

Prices increased by 8.8% year on year in Tasmania, by 5.5% in the Australian Capital Territory and by 3.8% in Queensland. But prices fell by 4.1% in Western Australia and by 7% in the Northern Territory.

Property prices fell by 1.7% in Perth, by 1.3% in Brisbane and by 2.5% in Darwin while prices rose in all other capital cities, the data also shows.

The total value of Australia’s 9.8 million residential properties increased by $274.2 billion to $6.4 trillion while the mean price of a home is now $656,800.

The large divergence in growth rates between Australia’s eight capital cities should not be a surprise, according to Harley Dale, chief economist of the Housing Industry Association (HIA).

‘Sydney and Melbourne represent 40% of Australia’s population and some concern regarding the trajectory of house price growth in these two markets is warranted. Elsewhere, people still scratch their heads when it comes to a supposed housing price boom because that simply hasn’t been their experience this cycle, even allowing for some recovery in prices in recent times,’ he said.

Dale hit out at speculation that interest rate rises and tighter lending are needed to cool the housing market. ‘There has been speculation regarding some tension between members of Australia’s Council of Regulators, plus an (appropriate) questioning of banks’ out of cycle interest rate hikes,’ he said.

‘People can make of that what they will, but let’s not lose sight of the main goal. Yes, there is some need to tighten lending conditions for some Australian housing markets in terms of geographical areas and dwelling types,’ he pointed out.

‘However, a blanket tightening of lending conditions, as now seems to be emerging again, is the wrong policy and risks damaging Australia’s financial stability. That is the very opposite to the ideal outcome authorities want to achieve,’ he added.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: