House price growth moderating
House prices are still growing, but the pace has moderated.
New research from the Housing Industry Association (HIA) has found house price growth across Australia’s capital cities has slowed during 2016. The research note found that, while capital city house prices grew 10.1% for the year to October 2015, price growth slowed to 6.1% for the year to July 2016. Unit prices increased by nearly the same amount, at 6.0%.
The HIA research also found that capital city house prices have risen 40% since hitting a low point in 2012. During the same period, unit prices rose by 29.8%.
The data has also revealed a wide divergence between Australia’s capital cities.
“The biggest uplifts have been in Sydney (+61.3%) and Melbourne (+42.0%). At the other end of the scale, Perth (-8.3%) and Darwin (-12.75%) prices have fallen substantially since peaking in 2014,” the research note said.
While the HIA said there had been “considerable variation” in house price growth during the current cycle, it found that price growth across Australia’s capitals has been uniform over the past two decades.
“In real terms, house prices have increased by 5.3% annually compared with 3.9% growth in unit prices,” the HIA said. “Despite the considerable differences in economic structure, geographies and the regulatory framework across Australia’s eight capital cities, real dwelling prices still behave in remarkably similar ways from city to city over long periods of time with detached house prices consistently growing more strongly than those of units, although there tends to be much greater price variation on the unit side of the market.”