It’s like a tale of two cities…
New research released by Onthehouse.com.au revealed a polarised growth trend across Australia’s capital cities, with August data showing steady growth in Melbourne and Sydney’s housing markets, offset against falls in Brisbane and Perth.
The findings show that the overall national growth rate has slowed significantly, with growth in the house market falling from 0.86% in July to 0.02% in August.
Growth in the unit market has also dropped during the same time period, from 1.62% to -0.37%.
The Melbourne house market defied the downward trend recording 2.31% growth in August, which is the highest monthly growth rate seen in this market since March 2013.
Growth in the unit market was also positive in August, at 1.00%.
Sydney houses sustained a steady growth rate of 1.52% in August while unit rates slowed to 0.10% from 2.35% in July.
The Brisbane and Perth house markets recorded the worst rates of growth in August, with values dropping -1.70% and -1.84% respectively.
Brisbane is a little different
The Brisbane housing market continues to defy the growth trend seen across other capital city markets, in particular the Sydney and Melbourne property markets.
Brisbane now offers an attractive affordable-lifestyle balance – and as the Queensland government repairs its balance sheet, job opportunities and housing values will begin to increase.”
The following tables demonstrate the August market performance for both houses and units across Australia:
Melbourne’s result surprises.
Melbourne has seen an unexpected increase in its August growth figures.
This is due to a predominately auction driven selling process that results in a more volatile market.
The quarterly trend report suggests that this number is probably unsustainable, and I expect a more moderate growth rate to resume in September.
Sydney is slowing
The Sydney market does seem to be slowing, although not as quickly as we expected.
Taking into account the median household income, the affordability measure is now at historic heights, with loan repayments taking about 54 per cent of the after tax income.
The current median house price is now only $147,500 away from breaching the million dollar mark. At this rate, we expect to hit this median within a five year period.
Graph 1 – Growth Trends