Fall in capital city median house price: Real Estate Institute of Australia (REIA)
Which markets are responsible for the fall in the weighted average capital city house price?
The weighted average capital city house price fell during the December 2015 quarter, and the onus is on Sydney and Melbourne.
While all capital cities -- albeit Adelaide -- recorded positive growth, Sydney and Melbourne’s in-the-red median house prices have pulled down the national average figure.
The capital city median price plummeted by 0.4% to $695,788 for houses and 0.7% to $543,468 for other dwellings during the final quarter of 2015, breaking thirteen consecutive quarters of growth for the figures, calculated by the Real Estate Institute of Australia (REIA).
However, the median house price drop is partly due to the sluggish performance in the Sydney and Melbourne markets where the figure fell by 2.5% and 0.1% respectively. All other capital cities recorded positive growth for the quarter, except Adelaide which recorded no change.
Hobart’s median house price was up a staggering 9.8% to $392,000 while Canberra saw 3.7% growth which pushed the median house price to $593,000. Darwin and Perth saw more modest growth rates.
However, the growth of the five capital cities was not enough to offset the falling median house prices in Sydney and Melbourne (and Adelaide’s stagnant position).
While there was a decline in the weighted average capital city house price during the quarter, if we compare the performance to the December 2014 quarter, the figure has lifted by 7.4%.
The U-turn of the median house price growth in Sydney has many speculating about negative gearing reforms and the future role for Australian investors.
While Sydney and Melbourne have witnessed strong growth in recent years, the decline in median house price for both markets indicates that they may be headed for a correction phase (without getting hysterical about the property ‘bubble’).
Median house prices in capital cities
| Capital city | Change | Median house price |
|---|---|---|
| Sydney | (2.5%) | $1,025,478 |
| Melbourne | (0.1%) | $718,000 |
| Hobart | +9.8% | $392,000 |
| Canberra | +3.7% | $593,000 |
| Brisbane | +3.2% | $490,000 |
| Darwin | +0.5% | $608,750 |
| Perth | +0.4% | $535,000 |
| Adelaide | No change | $430,000 |
