Property prices across Australia’s capital cities surged strongly during March, taking prices to a whole new level according to the latest RP Data-Rismark.
Melbourne led the charge with an impressive 5.4% median price growth during the first quarter of 2014. Sydney buyers pushed prices up by another 4.4% and Hobart continued its growth momentum by adding another 4.7% growth.
was the only capital city to experience a negative result for the quarter, falling -0.6%, however for the month of March the city did experience growth of 0.6%.
While Melbourne recorded the strongest quarterly growth, the Sydney housing market showed the most substantial increase beyond its previous market high, according to the report.
“Sydney dwelling values are now 15.8% higher than their previous peak, substantially more than Melbourne where dwelling values are 4.7% higher than their previous peak,” RP Data research director Tim Lawless said.
“Perth and Canberra values have also risen to be 2.9% and 1.2% higher than their previous high point, respectively.”
While the growth results are positive within the housing market Australia-wide, Lawless warned that the current pace of growth cannot be sustained long-term.
“Dwelling values increased by just 2.9% over the first twelve months of the cycle, however, since last June, values are up by close to 13%,” Lawless said.
“Over the long term, I don’t believe such a strong pace of growth can be sustained - we expect housing market conditions to cool down as the year progresses.
“If the pace of capital gains doesn’t slow, we may see higher interest rates realised much earlier than previously expected.”
The results are also causing experts to reinforce sentiment that the Brisbane market could be the one to watch.
With the market remaining 5.2% below its previous peak, and offering one of the best rental yields of all Australian capital cities, 5.5% for units, Ben Skilbeck, Rismark’s managing director believes recent results have negated any idea the city may experience a downward trend.
“With Brisbane dwelling values up 2.9% for the month ended 31 March 2014, it now looks like the 2.0% fall in February was representative of natural market volatility as opposed to being indicative of a downward trend,” he said.
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