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Growth returns to sustainable levels: Residex

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New data shows capital city markets slowed down over the past month, signalling a return to more moderate, long-term growth, according to a leading analyst.

Over May, Residex data shows house prices fell in all the capitals except Canberra, Brisbane and Sydney.

Perth experienced the worst drop as the median plunged by 1.9 per cent.

On the other hand, Canberra had the strongest results, recording a 0.55 per cent increase.

The unit market was even less buoyant, with Darwin and Sydney the only capitals to record a rise in values.

Hobart suffered the worst downturn as unit prices fell by a whopping 2.38 per cent over the month.

Although these figures suggest the market may be slowing, Residex founder John Edwards believes the results are a positive signal for investors.

“The monthly numbers are ‘beautiful’ as far as I am concerned and are what I had been hoping for,” he said.

In Mr Edwards' view, the market’s rapid acceleration was unsustainable over the long term.

“Housing markets, particularly Sydney, were moving to a 'boom-like' performance. This was dangerous and could have led to a 'bubble' and a severe correction if it continued,” he said.

“The slowing of the market at this point in time suggests we are going to avoid this outcome."

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