After half a year of depressed prices, the Australian property market has rebounded to record consecutive months of positive growth.
The latest RP Data-Rismark Hedonic Property Index showed Australian capital city property prices had increased in both September and October by 0.2% and 0.4% respectively.
This latest upturn seems to contradict predictions in April by some top economists that Australian prices would fall by as much as 10-30% in the next two to three years.
"The October RP Data-Rismark Index results reinforce my suggestion that the Australian property market has moved through the bottom of its cycle," said Tim Lawless, head of research for RP Data.
While real estate values have slipped 0.8% in the past 12 months, Lawless said this was still a "phenomenal" result from an investor's perspective when compared to the 40.5% drop in the S&P/ASX 200. He said the future of residential property looks bright in 2009
"Investors need to take into account current supply constraints, infrastructure delivery, immigration, vacancy rates, rising rents and expectations that interest rates will continue to fall," Lawless said. "These are the basics that should fuel capital gains for investors."
Looking back over the past 12 months, the top performing capital cities in terms of median dwelling value were Darwin and Adelaide, which gained 8.80% and 7.23% respectively. Darwin still has the least expensive units of any capital city at a median of $312,146, and Adelaide's median house price remains the lowest at $410,942, according to RP Data.
Perth was the worst performing capital city, as residential property values fell 4.8% over the year to October. Perth still has the most expensive units in Australia, with a median of $455,286, according to RP Data.
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