Different approach needed as capital city price gap widens

The widening gap between dwelling prices in Australia’s capital cities highlights why regulators should reconsider broad-based policy responses to the country’s housing market.

Figure released this week by the Australian Bureau of Statistics show that over the year to June 2015, residential property prices in Sydney and Melbourne grew by 18.9% and 7.8% respectively, while Brisbane, Canberra, Adelaide and Hobart saw growth of between 2.9% - 1.5%.

Over the same 12-month period, prices in Darwin and Perth decreased by 1.2% and 1.8% respectively.

The figures mean that the average residential property price in Australian capital city now sits at $604,700.

Source: HIA/ABS

“The wide divergence of dwelling price growth across the capitals is indicative of the mixed economic conditions across Australia. It highlights the challenges in prescribing ‘one-size-fits-all’ policy responses to the housing market,” Housing Industry Association senior economist Shane Garrett said.

“Price pressures ultimately represent the inadequate response of supply to much stronger demand conditions. We need to see more flexibility in the planning process and in the release of new residential land in order to take the heat out of prices,” he said.

The figures also support the opinion of Geoff Baldwin, chairman of Certified Practising Real Estate Agents, who believes the idea of a national real estate market in Australia is outdated.

“It is not since the recession of the late 1980s, early 1990s that we have seen all states reflecting similar results across the board,” Baldwin said.

“During the recent booms of Sydney and Melbourne and all the hype that has gone with that, we have seen SA, WA and NT in decline and Queensland doing little more than holding its own,” he said.

“Now as those booming states start to slow the overriding commentary is that “the” real estate market is cooling which is a lazy generalisation that should be examined carefully by property investors.

“While over time a national trend does exist, year by year each state and territory has shown to be a market in its own right and all indications are that this will continue.”

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Top Suburbs : west rockhampton , canterbury , willoughby east , north epping , millner

go back

Get help with your investment property

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here