Solid Gains, But House Price Growth Likely To Moderate | ANZ Bank

This week’s ANZ Property Market Update discusses the latest auction market results.

Here’s what they had to say:


Average capital city house prices recorded a solid rise in October, led by gains in Sydney and Melbourne. Near-term, auction clearance rates suggest some moderation in the pace of house price growth.

Into 2015, deteriorating affordability in some states and subdued household income growth foreshadow some further loss of momentum.

  • The capital city average house price rose a solid 1.1% to a new historic high of AUD681,640 in October in seasonally-adjusted terms.
    Annual growth, however, continued to moderate, rising 9.0% in October, down from a recent peak of 11.8% in April.
  • House price gains were broad-based across the major capital cities, with Melbourne and Sydney leading the gains.
    Melbourne house prices rebounded 2.2% m/m in October in seasonally adjusted terms, following a similar sized fall in September.
    Sydney house prices (+1.2%) recorded their 17th consecutive monthly rise, and annual growth remained solid at 13.7% although this is down from a recent peak of 18.2% y/y in May.
  • Looking ahead, auction clearance rates have eased since the peaks of early 2014, and point to further moderation in home price growth in the coming months.
    Further out, gains in house prices and soft household income growth have effectively closed the ‘affordability gap’ in Sydney, Melbourne and Perth.
    This will limit the pace of price gains, particularly in 2015 as the monetary policy tightening cycle begins.


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