House prices across Australia climbed by 3.1 per cent to an average annual growth rate of 6.4 per cent - more than double the rate of inflation over the same period, according to figures released this week by the Australian Bureau of Statistics (ABS).
Building industry body, HIA, commented that the long-held relationship between higher interest rates and falling house prices is likely to be somewhat disconnected for the rest of the decade.
HIA's Executive Director of Housing and Economics, Simon Tennent, said that higher rates will clearly reign in discretionary spending and have already taken the wind out of the sales for the building industry but with an estimated shortage of some 25,000 dwellings nationwide, demand pressures will keep prices high.
"It is crucial that the pressure is lifted off the housing sector by increasing the supply of affordable housing and attracting private rental investment. Lowering the cost of land and easing the tax and regulatory burden on Australia's building community is an obvious and immediate step in the right direction," Mr Tennent said.
House prices rose in all cities: Perth (+11.9 per cent), Darwin (+3.6 per cent), Canberra (+2.6 per cent), Adelaide (+2.3 per cent), Brisbane (+2.1 per cent), Melbourne (+2.0 per cent), Hobart (+2.0 per cent) and Sydney (+1.4 per cent).
For brand new homes (excluding the land cost) prices also rose in all cities, up by 4.1 per cent in Darwin, by 3.9 per cent in Perth, by 1.5 per cent in Brisbane, 0.9 per cent in Canberra and Hobart, 0.8 per cent in Adelaide, 0.6 per cent in Melbourne and 0.5 per cent in Sydney.
