There has been much talk over the past year about house prices rising or crashing dramatically, but industry experts now seem to agree that, overall, the housing market has experienced a correction rather than a crash and steady growth is expected to continue.
Putting a national perspective on the market, prices in Western Australia and the Northern Territory have increased considerably over the last twelve months, fuelled by a resource boom in those regions. House prices have largely remained steady in other parts of the country.
Home buyers and investors have been snapping up properties in Western Australia, causing house prices to continue to rise as demand outstrips supply.
While the rate of house price growth slowed in the March quarter, median house prices in Perth still rose 5.1 per cent to over the quarter to $353,000, and 23.9 per cent over the year. Housing investors are being rewarded with an increase in median rents of 4.5 per cent over the quarter, and vacancy rates of only 1.4 per cent.
Likewise in the Northern Territory, house prices went up 2.1 per cent in the March quarter to $335,000, and a massive jump of 21.8 per cent compared with the March quarter 2005.
Elsewhere the market is steadier, with quarterly growth of 2.2 per cent in Hobart to bring the median house price to $282,500 (a 4.2 per cent increase from March quarter 05), and growth of 1.9 per cent in Canberra to a median house price of $375,000 (a 2.5 per cent increase over the year).
Although Melbourne and Adelaide recorded quarterly falls in their median house prices of 3.1 per cent to $359,500 and 0.4 per cent to $277,000 respectively, in both cases, there was growth over the year with prices up 3.3 per cent in Melbourne and 0.7 per cent in Adelaide.
Sydney was the only market to record a decline in prices over the quarter and the year to the March quarter 06. Median house prices fell 1.0 per cent over the quarter and 3.6 per cent over the year to $516,000. Median other dwelling prices fell 1.4 per cent over the quarter and 3.0 per cent over the year to $358,000.
However, the market for other dwellings is firmer across Australia, up 0.6 per cent over the quarter and 4.9 per cent over the year in Adelaide to $215,000; up 0.8 per cent over the quarter and 5.3 per cent over the year in Melbourne to $307,500; up 3.8 per cent over the quarter and 22.2 per cent over the year in Perth to $275,000; and up 4.2 per cent over the quarter and 3.3 per cent over the year in Canberra to $301,000. Prices increased 18.9 per cent over the quarter in Hobart to $220,000 but this was a slight decline of 0.5 per cent over the year.
REIA President Tony Brasier said that steady growth in the housing market in much of Australia should continue, although interest rates and petrol prices are having an effect.
"The gentle decline in the Sydney market represents a continuing trend to a more even keel, following the dramatic price rises we saw a few years ago," Mr Brasier said.
"WA remains in catch-up mode with its booming property prices, although this has also been driven in large part by the booming export market for commodities. Addressing infrastructure, land supply and skills shortages in the construction sector must be a priority in WA."
Mortgage Choice National Manager Corporate Affairs, Warren O'Rourke said that, overall, Australian property owners should be satisfied with the state of the housing market.
"The latest house price information is good news," Mr O'Rourke said, adding that the housing market had experienced a correction rather than a crash and there was no need for panic.
"Now prices in most states are trending upwards again and the savvy investor will be looking into available bargains in areas where prices will soon increase at a somewhat faster rate. It is a cycle that those with long memories have come to know well."
