Powered by MOMENTUM MEDIA

Sydney house prices struggle while Hobart sees best growth in over a decade

research
1 minute read

Sydney house prices struggle while Hobart sees best growth in over a decade

by Sasha Karen 01 February 2018 1 minute read

This quarter’s State of the Market Report – Metro has been released by Domain, which details the current state of the capital city property market in Australia, showing that the Sydney market is still struggling, despite a slight rise.

Sydney, Australia, house prices, best price growth, property investments, property investing
February 01, 2018

Overall, the report shows the national median house price rose 1.4 per cent over the December quarter to $813,024, while the annual growth was 5 per cent, its lowest point in 15 months.

National median unit prices rose slightly by 0.3 per cent over the quarter to $557,794, and much like the houses, the unit growth rate recorded 2.3 per cent, another 15-year low.

“A varied level of price growth across all capital cities was reflected in both the national median house and unit prices this quarter,” said Domain data scientist Dr Nicola Powell.

“Overall, prices rose marginally in the three months to December but the slower pace has weighed down the annual growth to its lowest rate since September 2016.”

Advertisement
Advertisement

Here’s a quick breakdown of how each of the capital cities are progressing, according to the report:

Sydney – declining

Median house price: Up 0.5 per cent over the quarter, up 4 per cent over the year to $1,179,519.

Median unit price: Down 0.4 per cent over the quarter, up 1.7 per cent over the year to $736,879.

According to the report, weakening investor activity due to tight lending conditions are continuing to hinder property growth in Sydney.

“House prices in the Harbour City continue to moderate in line with an investor activity slowdown, and first home buyer participation rates are at their highest level in six years as entry-level buyers respond to state government incentives,” Dr Powell said.

“Sydney’s double-digit growth phase appears to be in the rear-view mirror, and with no further rate cuts in sight, the market may continue to moderate in 2018.

“Demand is likely to weaken, as the heightened investor activity that Sydney has experienced is unlikely to be significantly offset by the rising number of first home buyers.”

Melbourne – rising

Median house price: Up 3.2 per cent over the quarter, up 11.3 per cent over the year to $903,859.

Median unit price: Up 2.8 per cent over the quarter, up 8 per cent over the year to $506,079.

Dr Powell said that while investor activity declines due to the current tight lending environment, the potential for future price growth is unknown at this point.

“However, steady population increases and government incentives may support ongoing demand as the year unfolds,” said Dr Powell.

“Similar to Sydney, first home buyer numbers in Melbourne have risen, recording its highest level of activity since 2009. This can be attributed largely to the Victorian government’s entry-level buyer incentives.

“In the coming months we are likely to continue to see a higher demand for entry-level homes, helping to drive price growth at the lower end of the market, as well as support regional price movements throughout the state.”

Brisbane – declining

Median house price: Down 0.6 per cent over the quarter, up 0.4 per cent over the year to $548,918.

Median unit price: Down 2.2 per cent over the quarter, down 4.5 per cent over the year to $385,955.

According to Dr Powell, the increase of new apartments is staying ahead of current demand which, alongside population increases and declining new development starts and completions, could bring balance to the market.

“Brisbane offers a large inventory of houses and units that fall under $500,000, and interstate migration has fuelled the Brisbane market over the past two years as out-of-state buyers head to the SunshineSunshine, NSW Sunshine, VIC State in search of a lower price point,” Dr Powell said.

Adelaide – rising

Median house price: Up 0.9 per cent over the quarter, up 3.5 per cent over the year to $552,815.

Median unit price: Down 1.6 per cent over the quarter, up 2 per cent over the year to $315,794.

“Adelaide has avoided the extreme price surges impacting Australia’s east coast markets. Its steady pace of growth and diverse coastal lifestyle makes it a reliable location for buyers heading into 2018,” said Dr Powell.

PerthPerth, TAS Perth, WA – declining

Median house price: Up 0.5 per cent over the quarter, down 2.5 per cent over the year to $557,567.

Median unit price: Up 1 per cent over the quarter, down 1.7 per cent over the year to $369,402.

Coming off months of declines, Dr Powell said the market is finally starting to show signs of growth.

“The annual pace of decline in Perth house prices has slowed compared to the steeper falls recorded in 2016, and the annual unit price decline is at its lowest in almost three years,” she said.

“Perth’s housing market outlook for 2018 depends largely on whether the city’s economy and population track upwards throughout the year.”

Canberra – rising

Median house price: Up 5 per cent over the quarter, up 8.4 per cent over the year to $753,516.

Median unit price: Up 0.1 per cent over the quarter, up 0.4 per cent over the year to $426,124.

The second best performing city this quarter, Dr Powell said that the median house price in Canberra has been rising for 15 months in a row.

“Renewed buyer and seller confidence has provided the nation's capital with a substantial price boost that will likely continue throughout 2018,” she said.

“Housing finance, retail trade and strengthening business confidence has been key to driving the ACT economy, in addition to spikes in tourism, infrastructure and capital initiatives have stimulated business, contributing positively to the economy.”

Darwin – declining

Median house price: Down 2.6 per cent over the quarter, down 7.4 per cent over the year to $565,696.

Median unit price: Up 9.3 per cent over the quarter, down 14 per cent over the year to $395,279.

The only capital city to record declines for median prices over the quarter and the year, Dr Powell pointed out that the Darwin market had to rely mainly on the territory economy this year.

“Despite the recent uptick in prices, annual trends in Darwin’s unit market are still on double-digit decline. The oversupply of unit stock in the city is impacting the market, and price drops have been a consistent trend for Darwin since December 2016,” Dr Powell said.

Hobart – rising

Median house price: Up 10 per cent over the quarter, up 17.3 per cent over the year to $443,521.

Median unit price: Down 0.8 per cent over the quarter, up 14.2 per cent over the year to $318,467.

Hobart was the highest performing capital city this quarter, with Dr Powell highlighting the house price rise has not been this high in over a decade.

“Despite the surges in price, Hobart still has the lowest median house price of all the Australian capital cities, and it remains a great option for buyers seeking an urban lifestyle with an affordable point of entry,” she said. 

Sydney house prices struggle while Hobart sees best growth in over a decade
Sydney, Australia, house prices, best price growth, property investments, property investing
spi logo

About the author

Sasha Karen

... Read more

From the web

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.