Housing prices vary across nation, reflecting the impact of local economies and supply and demand drivers, says Domain Group.House and unit prices continue to vary across regional and capital cities, with the national median house and unit prices recording modest growth in the March quarter.
Domain Group’s latest House Price Report shows the national median house price increased by 1.8 per cent across the quarter, contributing to an annual increase of 8.0 per cent. The national median unit price increased by 0.4 per cent and 5.2 per cent in the year to end of March.
At a Victorian regional level, the REIV reports Ballarat rentals and Geelong sales and rentals, remain strong, with the market buoyed by low interest rates, CEO Enzo Raimondo said, which was good for investors.
“Despite some economic uncertainty around employment levels, consumer confidence has picked up since the March interest rate cut,” Mr Raimondo said. “This is flowing through to the property market.”
Dr Andrew Wilson, Domain Group senior economist, said that despite lower interest rates, varying economic activity in different states meant there were mixed results for house and unit price growth in capital cities.
Sydney continued to soar with a strong quarterly increase of 3.6 per cent, taking the median house price to a new record of $914,056. In the March quarter, the median unit price also increased by 1.2 per cent to $609,800.
Adelaide and Darwin were the only two other capital cities to record increases in both house and unit prices; while Melbourne and Canberra recorded an increase in the median house price of 2.2 per cent and 1.1 per cent respectively; and falls in unit prices at 0.3 per cent and 3.6 per cent.
House and unit prices fell in Brisbane, with the median house price falling marginally by 0.7 per cent while units fell sharply by 2.3 per cent.
“Melbourne, Canberra and Brisbane saw falls in the median price of units as the impact of recent construction and new supply filters through to the market,” Dr Wilson said.
The REIV’s House Price Index (HPI) reported price growth continued to strengthen with regional Victoria rising by 0.9 per cent in March to 133.5. The HPI also rose in Melbourne, increasing 0.8 per cent to 171.6.
A key contributor to the regional increase was Geelong, Mr Raimondo said, with the index for the region up 0.4 per cent. He said the auction market, which was a key determinant of activity in regions close to Melbourne, continued to grow. In the year to date, 7600 auctions took place statewide, with most (4200 auctions) in March.
“The 76 per cent statewide clearance rate for the year to March 31 was the highest for five years. We expect that in the short term the low interest rate environment will continue to drive demand,” Mr Raimondo said.
“More broadly across the state, private sales continue to be common, and statewide in March there were 10,780 sales in total – an increase on March last year when there were 10,600 private sales.”
For investors in regional Victoria rental vacancy rates remained stable at 2.1 per cent in March and 50 basis points lower than a year ago.
“While the rate actually eased to 2.8 per cent in both Ballarat and Bendigo, both of which have been experiencing severe accommodation shortages, in Geelong it has been tightening for the past six months,” Mr Raimondo said. “The rate of 3.1 per cent there is at its lowest since April 2013.”
Median house rents across regional Victoria were stable at $300 a week, while median unit and apartment rentals were up $5 to $245. Median unit rents in Geelong were up $10 to $290 and Ballarat were up $30 to $240. Both vacancy rates and house rents in Melbourne’s outer suburbs remained stable, while unit rents there increased from $316 to $320.
According to Domain Group, in Perth the median house price fell steeply by 2.1 per cent while units were flat across the quarter.
Hobart saw house price growth weaken with the median falling by 0.6 per cent while unit prices increased strongly by 5.0 per cent.
“Capital city prices growth is likely to track local economic performance with the prospect of lower interest rates now diminishing as early signs continue to emerge of an improvement in national economic activity,” Dr Wilson said.
“Sydney will continue to lead the pack in house price growth – clearly ahead of Melbourne, Adelaide, Canberra, Brisbane and Hobart, which are set to continue to record modest to moderate prices growth on the back of improving economies.“Flattening economic activity and falling confidence in Perth, and to a lesser degree Darwin, will continue to put downward pressure on house price growth as those capital cities transition rapidly from their previous resource and population boom environments.”
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