Sydney house price now over $1,100,000 as unit price exceeds $700,000
Sydney reported its highest median house price growth of the year over the December quarter, rising by 4.7 per cent to a remarkable new record high of $1,123,991.
Annual house prices increased by 10.7 per cent over 2016 which was the best result of all the state capitals for the sixth consecutive year.
The December quarter result was the clearly the highest of the year and a significant turnaround on the 3.0 per cent fall in prices recorded over December 2015.
Sydney houses price growth rates increased over every quarter in 2016 with market activity clearly escalating over the year.
Sydney unit prices also peaked over the December quarter increasing strongly by 2.9 per cent to a median of $711,256.
The December result was the highest local quarterly growth rate recorded for units since June 2015.
Sydney unit prices increased by 6.3 per cent over 2016 which was clearly the highest annual growth rate of all the capitals.
Yet another strong result for remarkably consistent Melbourne market
The Melbourne property market continues to track Sydney with another strong result recorded over the December quarter.
The Melbourne median house price increased by 3.6 per cent to a record high $795,447.
Melbourne house prices rose by 10.3 per cent over 2016 and have now increased sharply by 48.0 per cent over the past 5 years although this still remains well below Sydney’s house price growth of 77.1 per cent recorded over the same period.
Melbourne however is clearly the nation’s most consistent housing market having now reported a remarkable 17 consecutive quarters of house price growth – a record breaking performance.
Melbourne unit prices increased by 2.4 per cent over the December quarter to a median of $459,181.
Despite the solid quarterly performance, Melbourne unit prices have risen just 2.8 per cent over the past year.
More solid price growth for Brisbane houses but unit prices are still falling
The Brisbane housing market finished 2016 on a positive note with the median house price increasing by 2.3 per cent to $540,758.
Brisbane house prices rose by 4.5 per cent over 2016 which was a slightly lower result to those recorded by the city over each of the previous three years.
Although Brisbane house market prices continued to record consistently solid results, local unit prices remain significantly in decline.
The median unit price fell sharply by 5.7 per cent over the December quarter to $358,426 – and a reduction of 7.6 per cent over 2016.
The annual decline in prices is the lowest reported since 2000 and the second lowest on record.
Brisbane unit prices are now at near 8 year lows.
Adelaide median house price climbs over $500,000 for the first time
Adelaide house prices increased by 1.0 per cent over the December quarter to a new record high of $501,166.
The December growth rate was the highest quarterly result of the year with the resilient local market now recording 8 consecutive quarters of house price growth.
Although the local market finished the year on a high note, Adelaide annual house prices increased by just 2.5 per cent over 2016 – the lowest annual result since 2012.
Adelaide unit prices also finished 2016 positively, increasing by 1.9 per cent over the December quarter to a new record high of $309,365.
Adelaide unit prices increased by 3.0 per cent over 2016 exceeding the annual growth rate of houses – the only state capital to produce this outcome.
More signs that Perth house prices may finally be bottoming out
The subdued Perth housing market recorded another decline in the median house price over the December quarter – but falling by just 0.5 per cent.
The December result was however an improvement on the previous quarters decline in prices of 0.7%.
Although Perth median house prices declined by 2.3 per cent over 2016, this result was nonetheless also an improvement on the previous year’s annual decline of 3.9 per cent.
The latest Perth median of $573,766 is now the lowest recorded since the March quarter 2013.
Perth’s median unit price also declined over the December quarter, falling sharply by 1.6 per cent to $369,946 – the lowest recorded since the September quarter 2012.
Perth unit prices fell by 6.5 per cent over 2016 – the sharpest annual decline since 2008 and the second highest on record for the local market.
Canberra house prices surge but units down
Canberra house prices recorded exceptionally strong growth over the December quarter increasing by 5.6 per cent to a new record high $684,395. Although the local median house price rose by a solid 5.0 per cent over 2016, it was nonetheless significantly lower than the 9.0 per cent recorded over the previous year.
By contrast to houses prices, Canberra unit prices declined sharply by 2.6 per cent to $413,697 over the December quarter and followed the strong growth of 2.7 per cent recorded over the previous September quarter.
Canberra unit prices declined by 2.2 per cent over 2016 the local markets lowest annual result since 2012.
Hobart December house prices boom
The Hobart housing market ended 2016 with a remarkably strong result with the median house price increasing sharply by 6.2 per cent over the December quarter – the highest increase of all the capitals.
Hobart house prices rose by 10.3 per cent over 2016 – a similar result to the booming Sydney and Melbourne markets and the local markets highest annual growth rate recorded since 2009.
Despite the recent strong growth in houses prices, Hobart remains clearly the most affordable capital city housing market with a current median of just $382,888.
Hobart unit prices also increased over the December quarter – rising by 1.4 per cent to a median of $258,242.
Despite the end of year increase, Hobart unit prices fell by 9.1 per cent over 2016 – the lowest result of all the capitals.
Darwin housing market now steadying
Darwin house prices fell marginally over the December quarter, down by just 0.5 per cent to a median of $591,167.
The December result follows a steady outcome over the previous quarter and is a significant improvement on the sharp declines recorded over the first 6 months of 2016.
Despite the recent moderation in quarterly house price declines, the Darwin median fell by 10.5 per cent over 2016 – the lowest result of all the capitals.
Darwin median house prices are now the lowest recorded by the local market since December 2011.
Darwin unit prices also recorded a steady result over the December quarter with the median remaining at $454,716.
Darwin quarterly unit prices increased by 6.1 percent over 2016.
Housing markets set to generally cool in 2017
Although prices growth generally strengthened over the latter half of 2016, the booming markets of Sydney and Melbourne are likely to fade through 2017 as the impact of the key drivers of the strong house price increases of recent years in those markets are set to diminish.
House price growth will continue to be positive for most other capitals but the underlying level of growth will likely be lower than that recorded over 2016.
Lower interest rates continued as the key overarching driver of prices growth in 2016 with official cuts in May and August clearly revitalising housing markets.
Resurgence in investor activity following announcements of prospective changes to property taxes was also a driver of increased housing demand over the second half of the year.
Melbourne and Sydney housing markets continue to be driven by surging migration attracted by strong local economic performances – particularly in Sydney.
By contrast, Perth and Darwin are still impacted by the end of the resources boom although signs are emerging that those recently subdued markets may now be stabilising.
Overall neutral outcomes are likely for interest rates over 2017 which will generally act to flatten the house price growth capacity of capital city housing markets.
Although a downward bias remains for official rate settings reflecting an increasingly underperforming economy, effective mortgage rates will likely continue to rise as bank profits are constrained by low local deposit rates, the increasing cost of international finance resources and changes to financial regulations.
Capital city markets are set to track within a narrower range in 2017 with continued steady outcomes for those smaller markets that have missed the boom-time energy of the larger markets of Sydney and Melbourne over recent years.
Those consistently top-performing markets, although unlikely to record the level of prices growth of recent years, will nonetheless continue to lead the pack although the margins will be significantly lower.
Unit prices growth will continue to track lower than houses in 2017 reflecting continuing higher levels of new supply impacting most capitals city markets.
The Brisbane unit market will likely continue to be the clear underperformer for price outcomes with Sydney to record positive growth and Melbourne unit prices steady over the year.
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