The imbalance between demand and supply in the housing market has begun to drive prices up, with house prices increasing during the June quarter in most capital cities, according to the June quarter edition of the Mortgage Choice/Real Estate Institute of Australia (REIA) Real Estate Market Facts.
House prices rose in Sydney, Melbourne, Canberra, Adelaide, Darwin and Hobart, but were unchanged in Perth over the quarter. Brisbane prices for the June quarter were not available at publication.
The report shows that further evidence of the impact of the demand-supply imbalance can be seen in moving annual (trend) median house and other dwelling prices.
There has been significant upward movement, with trend prices in Perth, Melbourne, Canberra, Adelaide, Darwin and Hobart now at their highest point ever. Sydney prices still remain subdued.
Rents have also increased significantly across the country over the year to June 2007, responding to historically tight vacancy rates.
Perth, Darwin, and to a lesser extent, Canberra, Melbourne and Brisbane, have seen the most sizeable increases in rents, with Darwin two bedroom other dwelling rents increasing as much as 36.4 per cent over the year.
Darwin has now overtaken Canberra with the highest median rent for three bedroom houses at $395 per week.
Canberra and Sydney share the top spot for two bedroom other dwellings with a median weekly rent of $330.
Adelaide remains the cheapest location to rent, with a three bedroom median house rent of $250 per week, and a median weekly rent of $200 for two bedroom other dwellings.
REIA President Graham Joyce said that while rent increases offer the prospect of improved yields for investors, thus attracting more investors back into the housing market, the price increases will continue to put pressure on rents.
`First home buyers will face even greater difficulty accumulating a deposit for a home purchase, with rents increasing', said Mr Joyce.
"Help is urgently needed from all levels of Government - starting points would be access to voluntary superannuation contributions, an increase in the First Home Owners Grant, and a reduction in state property taxes."
Mortgage Choice National Manager of Corporate Affairs, Warren O'Rourke, said that research by Mortgage Choice into first home buyers found that they believed the government initiative which would benefit them most was an increase in the First Home Owners Grant.
"With the majority of potential first home buyers having less than $10,000 in savings, the First Home Owners Grant makes a significant contribution to the deposit required to buy a home via the more traditional type of loan", Mr O'Rourke said.
