Median house prices rose slightly around the country in the December quarter according to data from Australian Property Monitors.
This is the first such rise for this index since late 2010, and it was dragged up by a stronger than expected result in the Melbourne market.
While this is good news, it’s clearly too early to tell whether the housing downturn has been halted.
Australian Property Monitors’ latest house price report shows that the national median house price rose marginally in the December quarter from $533,521 to $533,650, while units slid backwards by 0.5 per cent.
This was the first sign of growth after five consecutive quarterly falls and was led by Melbourne house prices, which recorded the highest median growth at 1.1 per cent.
APM’s senior economist, Andrew Wilson, said the strong growth in house prices in Melbourne was almost exclusively due to large rises at the prestige end.
Dr Wilson said Melbourne’s prestige market had been depressed for an extended period and the growth was from a very low base.
Hobart and Adelaide house prices both rose 0.5 per cent.
Sydney’s median remained steady at $636,822. First home buyers eager to beat the end-of-year deadline on stamp duty exemptions were active in the market at the end of last year and kept prices stable.
Brisbane property prices were down 1.2 per cent and resource-reliant Perth (down 1.2 per cent) and Darwin (down 0.5 per cent) both underperformed.
The markets are still patchy
”The small growth in the national median house prices was due to an increase in buyer activity in the bottom end of the market in Sydney and, by contrast, in the top end of the market in Melbourne,” said APM senior economist Andrew Wilson in an article in the Sydney Morning Herald.
Overall Dr Wilson described the national housing market as still ”patchy and anaemic”, something that could change if interest rates continued to fall.
”Looking forward, 2012 will provide mixed outcomes for housing markets, with some capital cities set to revive while others will remain flat.”
Both the recent RPData www.rpdata.com figures for November and this report for the December quarter suggest that property prices are stabilizing, but I don’t see this as the beginning of the next upturn…not just yet.
To me it looks like the Australian housing market will be a “tug-of-war” this year with low interest rates pulling hard on one end of the rope and economic uncertainty joining forces with subdued prospects for economic, income and employment growth at the other.
I expect the economic side of the equation to win out in the near-term, influenced in the first half of 2012 at least by continuing global financial turbulence.
This is likely to cause the RBA to drop interest rates once or twice in the first half of the year and this should underpin our property markets.
I’ll explain my thoughts for 2012 in much more detail in my first market update that will be emailed out on Friday
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