Preliminary estimates of median prices for houses and other dwellings in the December quarter 2005 for Melbourne, Adelaide, Perth, Canberra, Hobart and Darwin have been released this week by the Real Estate Institute of Australia (REIA) in conjunction with Mortgage Choice.
Announcing the release, REIA President Tony Brasier said that the December quarter results show house prices continued to rise strongly in Darwin and Perth, and that there was a resurgence towards higher prices in Melbourne, Canberra and to a lesser extent, Hobart.
"These results help demonstrate what we've been saying all along - in the last 18 months or so, the housing market has been experiencing a correction rather than a crash", said Mortgage Choice National Corporate Affairs Manager Warren O'Rourke.
`It is fabulous to see the market strengthening in terms of prices. It is also a reminder to property investors that it may be time to stop cooling their heels and invest in property now - whether they are first home buyers or property investors.'
Median house prices in Darwin recorded very strong growth of 9.3 per cent over the quarter to reach a median price of $328,000. Strong quarterly growth was also recorded in Melbourne (up 5.6 per cent to $375,000), Perth (up 5.5 per cent to $325,000) and in Canberra (up 5.1 per cent to $368,000). More moderate quarterly growth of 3.8 per cent to $276,500 was recorded in Hobart.
Growth over the year to December 2005 in these cities showed much wider variation, with Darwin up 26.2 per cent, Perth up 18.2 per cent, Canberra up 5.1, Hobart up 4.3 per cent and Melbourne up 1.4 per cent.
Adelaide prices have remained flat with the December quarter 2005 median price of $270,000 being 1.8 per cent lower than the September quarter, and unchanged compared with a year ago.
Median prices for other dwellings (flats/units/townhouses) also grew strongly in Darwin and Perth. The median of $242,000 for Darwin was up 7.6 per cent over the quarter and 38.3 per cent over the year, and the median price of $258,000 in Perth was 4 per cent higher over the quarter and 17.3 per cent higher than a year ago. The Melbourne median of $307,000 for other dwellings was 2.3 per cent higher over the quarter and the year.
The other dwellings median price of $289,000 in Canberra was 1.9 per cent lower than in the preceding quarter but 5.9 per cent higher than a year ago. The Hobart median of $185,000 was 9.8 per cent lower compared with the September quarter and 11.1 per cent lower than a year ago.
"The indications from the December quarter median prices are that underlying demand for residential property continued to be very strong in Darwin and Perth reflecting the buoyant economies in the Northern Territory and Western Australia. Stable interest rates and improving consumer confidence contributed to increased demand and higher median house prices in most of the other capital cities during the quarter. However for the immediate future we expect the residential property market to stabilise", said Mr Brasier.
"The increase in median house prices in most capitals occurred despite continuing concerns about home loan affordability. Whilst first home buyers are increasingly returning to the property market, their current percentage (19 per cent) of total home loans being financed is still short of the longer term average of 20-25 per cent. But this should be no excuse for becoming complacent about the need for action to help improve home loan affordability now that we are beyond the period of unprecedented increases in residential property prices experienced from mid-2002 to mid-2004", he said.
