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Australia’s capital city housing markets continue to tread water

The latest figures from RP Data show Australia’s house price increased just 0.1% in September, meaning capital city house prices have basically not risen since May.

Regional house prices have basically been steady since December last year.

During the month of September, Sydney prices increased 0.9%, with a rise of 0.5% in Melbourne and 0.7% in Brisbane.

Prices in Perth dropped 1.9%, while prices in Darwin were down 1.1%, down 0.8% in Adelaide, and down 0.3% in Canberra.

In th report Rismark managing director Christopher Joye says price are likely to track sideways for the rest of 2010, but warns predictions of further rate rises could put further pressure on prices in the short to medium term.

“Home loan rates will eventually start increasing, with the prospect that the peak mortgage rate could converge to close to 9%, which is more than 1.5% higher than the current average variable mortgage rate of 7.4%.

“Our analysis suggests that a substantial increase in rates would put some downward pressure on dwelling prices. Household balance-sheets will be supported by a strong labour market and robust income growth.

“But let’s be clear: it is now just a matter of time before the RBA and/or the banks raise rates again. New borrowers taking out loans should be prepared to service rates 1.5% higher than what they are currently paying.”

However, lack of price growth does create some opportunities for investors, according to RP Data senior analyst Cameron Kusher.
“Early signs suggest that rental rates are once again improving, listings are at above-average levels, and leading indicators such as time on market and vendor discounting are creeping up,” he says.

“For those active in the market there is increasing scope for price negotiation and less competition among buyers with an above-average number of properties for sale. These conditions are likely to afford opportunities to purchase property at more competitive prices.”



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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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