National dwelling prices are on the road to recovery, but there is still a long trek before it comes back to its historic highs.
The recent RP Data-Rismark home index of capital city home prices rose by 0.3 per cent in February, with four of the eight capital cities recording a rise in value.
The growth was mainly driven by the Melbourne market, up by 1.5 per cent, while increases were also seen across Sydney, Canberra and Darwin, recording 0.1 per cent, 1.9 per cent and 2.3 per cent growth respectively.
All remaining capital cities experienced a fall, with Brisbane being the hardest hit city, experiencing a slide of 1.1 per cent over the month, after rising 2 per cent in January.
RP Data national research director Tim Lawless said the flat February performance comes after a very strong January, where dwelling values index rose by 1.2 per cent across the eight capital cities.
“The February results are not as broad-based as what was recorded in January with half of Australia’s capital cities recording a lift in dwelling values over the month, while the other half recorded a drop.
“The trend for most cities remains positive however, with six out of the eight capital cities showing growth over the past quarter and five of the eight capitals over the past twelve months.
According to Mr Lawless, most housing markets have bottomed out around May last year, and since then, have recorded a 3.3 per cent increase across all capital cities.
“While the housing market is staging a demonstrable recovery, we need to see values rise a further 4.3 per cent before we can say that a technical recovery has been achieved. That amount of value appreciation is likely to be at least six months away,” he said.
Compared to detached houses, units have emerged as the stronger performer, achieving a 2.3 per cent increase compared to a 1.2 per cent gain in house prices over the year.
Strong auction clearance rates, 55 per cent higher or so far this year, and the reduction of number of homes for sale, tracking 2.2 per cent listings lower than the same time last year, were identified as other factors pointing towards a housing market recovery.