House prices are rising at a faster-than-expected pace in Sydney and Melbourne, and these gains are starting to be felt in other markets, figures from the Australia Bureau of Statistics (ABS) show.
Over the September quarter, house prices across combined capitals grew by 2.4%, led by the gains in Sydney and Melbourne.
Brisbane and Hobart have posted positive, albeit smaller, adjustments in the quarter, growing respectively by 0.7% and 1.3%. Detached homes in both cities lifted the overall housing values.
Brisbane's detached housing market has recorded a slightly higher quarterly growth rate relative to the unit sector, with values up 0.9% for houses and 0.4% for units. In Hobart, unit prices remained steady while house prices grew by 1.5%.
In Sydney, house values reported a 3.6% increase, driven by the 4% gains in the detached segment and the 2.8% growth in the unit sector. Melbourne registered the same growth rate but there is a little difference between the gains in both sectors.
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In markets currently experiencing a downturn, the rate of decline in housing values started to moderate. Take Adelaide as an example. The city's housing market has been weakening since its peak in the December quarter in 2016 and has slipped into the negative territory during the first quarter of the year. Over the September quarter, however, housing values in Adelaide were down by just 0.3%.
Perth's price decline also eased. Saved by the 1% rise in unit values, Perth witnessed only a 1.2% fall in overall housing values. This could point to Perth finding the bottom of what seemed to be a very long downturn.
Darwin, which has been on a downtrend since 2014, continued to see improvement, with housing values falling by just 1.2% over the quarter. Its unit market, however, remained a drag.
On the other hand, units kept values in Canberra from falling further. During the quarter, dwelling values in the city fell by 0.5% due to the 1.4% fall in detached homes. Canberra’s unit market reported a 2.4% increase in value.
Figures from ABS mirror what was reported by CoreLogic during the quarter. CoreLogic's recent report attributed the growth in housing values to the increased participation of property investors.
"Although markets outside of Sydney and Melbourne aren't showing the same recovery trend, most areas have either seen a reduction in the rate of decline or are seeing a modest trajectory of growth as low mortgage rates and a slight loosening in credit policy support buyer demand," CoreLogic head of research Tim Lawless said.
While there were minor differences between ABS and CoreLogic's data, Lawless said both showed similar trends.
"The housing market is clearly on a strong recovery path in the largest cities, and growth is now rippling out to many of the smaller capital cities," he said.
