Capital gains have moved back to more sustainable levels in August, according to the latest RP Dat-Rismark Home Value Index.
The August index showed capital city dwellings have risen 0.5 per cent in August – a slowdown from previous months where capital gains were recorded at a higher rate of 1.6 per cent in July and 1.9 per cent in June.
RP Data research director Tim Lawless said the slower month-on-month result is a welcome sign after the strong growth conditions of previous months put the sustainability of dwelling values into question.
“If we did see growth rates maintain at 1.5-1.6 per cent, which is what we’re seeing in July, then arguably you’re getting into some fairly unsustainable growth conditions and we’ll start to see a response from policymakers like the reserve bank.”
Mr Lawless said, however, that he “wouldn’t be surprised if we see a further bounce in the growth rate over the coming months.”
August tends to be quite seasonally slow while September, October and November are quite often seasonally strong, he said, with spring seeing more properties hit the marketplace.
“We’ve already seen buyer numbers rising substantially and I think that momentum will continue, so I’d say what we’re seeing in August is just a seasonal slowdown,” he said.