The latest data shows that prices in Australian capital cities rose by 2.3% last month, and values were up in every state month on month. Data for the March quarter also showed gains of 3.5% during the first quarter of this year.
Every capital city in the country saw values rise over the past three months with the exception of Perth. The highest level of growth was seen in Melbourne, with values increasing by 5.4% during the last quarter, while values in Hobart were up by 4.7%, and values in Sydney were up by 4.4%. The article in Propertywire goes on to point out that half of all capital cities in Australia are now seeing property values hit record highs, with the markets in Sydney seeing the most substantial increase.
Values in Sydney are now 15.8% higher than the previous market highs. This is considerably higher compared to Melbourne where values are 4.7% higher than previous peaks. Values in Canberra and Perth have increased beyond previous highs by 1.2% and 2.9% respectively. Apparently most of the growth in the real estate market has occurred since June 2013.
The new growth cycle began in June 2012, and during the first year values were up by just 2.9%, but since last June values have risen by nearly 13%. Real estate experts don’t feel this pace of growth is sustainable and anticipate housing markets will cool as the year continues. They point out that if the cooling doesn’t happen then higher interest rates may be introduced much earlier than expected. However they do point out that both March and September are strong seasonal months, so it’s not a great surprise that figures for March should have been substantially stronger than for February.
The article also went on to talk about Brisbane as the market is still 5.2% below the previous peak values and has one of the best rental yields out of all the capital cities. Experts feel that Brisbane could be the market to watch.
Across the market as a whole, premium properties remain the best performers. Homes in the most expensive quarter of the market rose by 7.2% in value over the past six months, while the value of lower-priced homes increased by 4.9% over the same period. Gross rental yields have been falling since June last year, and although home values have increased by 12.5% in capital cities, weekly rents have risen by just 1.8%.