Sydney’s annual house price growth has slowed and the growth in its apartment values are at a 15-month low, while Melbourne’s median house price exceeds $900,000 for the first time.
Online property portal Domain says the median house price in most capital cities rose over the December quarter.
However, less investor activity and stricter lending conditions have continued to put the brakes on Sydney, the country’s biggest housing market.
The median house price in Sydney crept 0.5 per cent higher to $1.18 million during the December quarter, while annual growth slowed to four per cent.
Domain data scientist Nicola Powell said house prices in the harbour city continue to moderate as investors retreat from the market.
‘Sydney’s double-digit growth phase appears to be in the rear-view mirror, and with no further rate cuts in sight, the market may continue to moderate in 2018,’ Dr Powell said.
‘Demand is likely to weaken, as the heightened investor activity that Sydney has experienced is unlikely to be significantly offset by the rising number of first home buyers.’
Sydney’s median unit prices decreased slightly to around $736,900, while on an annual basis prices are up 1.7 per cent, the slowest growth rate in 15 months.
Another quarter of solid growth has pushed Melbourne’s median house price to $903,900, exceeding the $900,000 mark for the first time.
House prices in Melbourne grew 3.2 per cent over the quarter and 11.3 per cent over the year, the city’s fifth consecutive quarter of double digit annual growth.
Similarly, Melbourne’s unit market strengthened, with prices increasing by 2.8 per cent in the quarter to hit a record high of $506,079.
Unit prices are up eight per cent annually, the strongest annual gain for Melbourne’s unit market in seven years.
‘As investor activity retreats and the housing market adjusts to tighter lending standards, it remains to be seen whether Melbourne’s remarkable price growth will continue,’ Dr Powell said.
‘However, steady population increases and government incentives may support ongoing demand as the year unfolds.’
She said first home buyer numbers in Melbourne have risen, driving activity to its highest level since 2009 due to the Victorian government’s entry-level buyer incentives.
OTHER CAPITAL CITIES – DECEMBER QUARTER MEDIAN PRICES:
* Canberra: house $753,516 (up 5.0 pct); unit $426,124 (up 0.1 pct)
* Brisbane: house $548,918 (down 0.6 pct); unit $385,955 (down 2.2 pct)
* Adelaide: house $522,815 (down 0.9 pct); unit $315,794 (down 1.6 pct)
* Hobart: house $443,521 (up 10 pct); unit $318,467 (down 0.8 pct)
* Perth: house $557,567 (up 0.5 pct); unit $369,402 (up 1.0 pct)