The Australian property market recorded an impressive 8.6% growth (Weighted Average all cities) in the twelve months to March 2007 according to the latest ABS House Price Index.
Growth in the quarter came in at 1.1% which is mainly as a result of conservatism after the last interest rate increase in November 2006. Since then rates have remain unchanged so confidence is rising across the board.
3 Months to March 07 |
Year to March 07 |
Year to March 06 | |
Weighted Average all cities |
1.1% |
8.6% |
3.6% |
Sydney |
-0.4% |
1.5% |
-3.1% |
Melbourne |
1.5% |
7.4% |
3.8% |
Brisbane |
2.9% |
10.2% |
2.8% |
Adelaide |
1.7% |
6.1% |
5.3% |
Perth |
2.1% |
32.1% |
28.8% |
Hobart |
3.8% |
10.5% |
9.9% |
Darwin |
2.8% |
15.0% |
17.4% |
Canberra |
1.2% |
9.0% |
1.4% |
Source: ABS House Price Index March 2007 | |||
The 8.6% result was a significant improvement over last years 3.6% and mainly a result of the continuing improvement in the Sydney property market.
Now that the NSW State Governments Vendor Duty has been abolished, markets in this state have slowly begun the road to recovery. The premium end and first home buyer sectors have led the charge, and now the general market is showing improving signs as well.
Perth once again led the way with an incredible 32.1% growth on the year, following on from last years 28.8% result. This has been achieved on strong State economic growth but a slow down in these growth rates is inevitable as the market gets used to the new price levels. This is clear in the quarterly growth figure which has normalized to a 2.1% result.
Brisbane was the top performing major city for the quarter with an impressive 2.9% growth, and an annual improvement of 10.2% to March 2007. This is expected to continue as the influx of population continues to pressure the market in Queensland.
Melbourne proved it has now entered its next growth phase with a steady 1.5% growth for the quarter and 7.4% result for the year. We are seeing strong activity in auctions in Melbourne, regularly exceeding the expected sale price.
Adelaide remains steady and Hobart and Darwin continue to show steady improvement as they become more popular due to the value they represent.
Overall, markets throughout Australia remain buoyant, largely as a result of the record influx of migrants being experienced. Last year over 130,000 new Australians arrived creating strong demand for housing.
Rents are beginning to feel the pressure with most landlords appreciating a rise in rental rates, and vacancy across Australia remains at record lows. Add to this a steady economy and stable interest rates and there is good reason to be confident about Australian property.
Given these conditions, we would expect to see an improvement in the annual growth results achieved to March 2007 in the coming year.
