National prices have increased over the quarter, although the annual growth rate is the lowest since 2012 – according to the latest quarterly Domain House Price Report.
Over the quarter, median house prices increased in all capital cities, except Perth and Darwin. The national median house price increased by 3.4 per cent to $780,887, the strongest quarterly result since the 2015 June quarter.
In contrast to the strong quarterly result, the calendar year growth rate was the lowest in four years, at 7.7 per cent.
The national median unit price also increased solidly over the December quarter, growing 1.6 per cent, to a record high of $546,422. Mirroring house price growth rates, this was the highest quarterly growth rate since June 2015 but, at 3.4 per cent, the lowest calendar year growth rate since 2012. Over the quarter, the median unit price increased in all capital cities, except Canberra, Perth and Darwin.
Key points this quarter
- National median unit price hits record high, with quarterly increases in Sydney, Melbourne, Adelaide, and Hobart
- Median unit prices decrease in Perth, Brisbane, and Canberra, while Darwin remains steady
- Median house prices increase in Sydney, Melbourne, Adelaide, Brisbane, Canberra and Hobart
- Median house prices decrease in Perth and Darwin
- Adelaide’s median house price breaks $500,000 for the first time
Commenting on the report, Domain Senior Economist, Dr Andrew Wilson, said:
“Capital city housing markets have clearly ended 2016 on the front foot, with most capitals recording their best quarterly results of the year.
“Prices in the top performing markets of Melbourne and Sydney continue to grow, driven by surging migration and strong local economic performances. By contrast, Perth and Darwin are still experiencing the market downturn brought on by the end of the resources boom, although signs are emerging that those markets may now be balancing out.
“Lower interest rates were the overarching stimulus for prices growth in 2016, with official cuts in May and August clearly revitalising housing markets. In 2017, more neutral outcomes are likely for interest rates, suggesting that house price growth in capital city housing markets will steady.
“Overall, prices continued to increase in the latter half of 2016 however, it’s likely that capital city markets will grow on a smaller scale in 2017, as key drivers of strong house price increases in top performing markets diminish.”
The median house price for Sydney increased by 4.7 per cent over the December quarter, to a new record high of $1,123,991. Sydney had the strongest annual growth of all the state capitals for the sixth consecutive year, with median house prices increasing by 10.7 per cent.
Sydney unit prices also grew over the December quarter, with the median price increasing by 2.9 per cent to $711,256. Sydney unit prices increased by 6.3 per cent over 2016, which was the highest annual growth rate of all the capitals.
“Sydney house price growth rates have increased over every quarter in 2016, with the median house price now over $1,100,000 and unit prices exceeding $700,000.
“The December quarter result was clearly the highest of the year and a significant turnaround on the 3.0 per cent fall in prices recorded over December 2015,“ said Domain Chief Economist, Dr Andrew Wilson.
The Melbourne median house price increased by 3.6 per cent over the December quarter, to a record high $795,447. This marks more than four years of consecutive quarterly house price growth for the city.
Melbourne unit prices also increased, up 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.
“This quarter shows another strong result for the remarkably consistent Melbourne market, which has continued to track closely to other capital city top-performer, Sydney, for price growth. Melbourne house prices rose by 10.3 per cent over 2016 and look likely to remain a healthy performer in 2017,” said Domain Chief Economist, Dr Andrew Wilson.
Brisbane’s median house price increased over the December quarter, rising by 2.3 per cent to $540,758. Overall, house prices in Brisbane rose by 4.5 per cent over 2016, a slightly lower growth rate than the city has experienced over the previous three years.
Brisbane’s median unit price fell sharply to $358,426, a decrease of 5.7 per cent over the quarter, and 7.6 per cent over the year. With this decrease, the Brisbane market is approaching its eighth year of annual decline in median unit prices.
“The Brisbane housing market finished 2016 on a positive note, with a healthy price growth. Although Brisbane house prices continued to record consistently solid results over the year, local unit prices experienced a rapid decline,“ said Domain Chief Economist, Dr Andrew Wilson.
Adelaide house prices reached a new record high of $501,166 over the December quarter. At 1.0 per cent, the December growth rate was the highest quarterly result of the year. However, Adelaide annual house prices increased by just 2.5 per cent over 2016 – the lowest annual result for the capital city since 2012.
Adelaide unit prices also increased over the quarter, growing 1.9 per cent to a new record high of $309,365. Adelaide unit prices increased by 3.0 per cent over 2016, making it the only state capital where the annual growth rate of units exceeded that of houses.
“For the first time, Adelaide’s median house price has climbed over $500,000, with the resilient local market now recording two years of house price growth.
“This result is in line with the general price growth seen across most capital city markets in 2016, stimulated by low interest rates and a surge in investor activity,“ said Domain Chief Economist, Dr Andrew Wilson.
The median house price in Perth declined over the December quarter, falling by a marginal 0.5 per cent, to $573,766. The moderate decrease is an easing of Perth’s rate of price decline, after a period of steep consecutive falls.
Similarly, while Perth’s median house price declined by 2.3 per cent over 2016, the result was less sharp than the previous year’s annual decline of 3.9 per cent.
Perth’s median unit price also decreased over the December quarter, falling by 1.6 per cent to $369,946, the lowest median recorded since the September quarter 2012. Perth unit prices decreased by 6.5 per cent over 2016 – the sharpest annual decline since 2008.
“While the price falls in Perth have continued over the December quarter, the quarterly rate of decline is easing, suggesting that the local market and house prices may be finally reaching a balancing point following the slow down of the resources boom,“ said Domain Chief Economist, Dr Andrew Wilson.
Hobart’s median house price has increased sharply over the December quarter to $382,888, a 6.2 per cent increase. Overall, Hobart house prices rose by 10.3 per cent over 2016, a similar growth rate to the booming Sydney and Melbourne markets, and the local market’s highest annual growth rate recorded since 2009.
Hobart unit prices also increased over the December quarter, increasing 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 steepest fall in unit prices out of all the capitals.
“The Hobart housing market ended 2016 with a positive result for investors, and a strong indication that prices will continue to grow. Despite the recent robust growth in houses prices, Hobart still remains the most affordable capital city housing market in Australia.“ said Domain Chief Economist, Dr Andrew Wilson.
Canberra house prices increased over the December quarter, with the median price reaching $684,395, a quarterly increase of 5.6 per cent – a new record high. Annually, the local median house price rose by a solid 5.0 per cent.
In contrast, Canberra unit prices declined over the quarter. The median fell 2.6 per cent to $413,697, balancing out the strong growth of 2.7 per cent experienced over the previous quarter. Canberra unit prices declined by 2.2 per cent over 2016, the local market’s lowest annual result since 2012.
“Canberra house prices have surged, recording exceptionally strong growth both over the quarter and year. However, the recent levels of new apartment construction have clearly affected price growth of units, with the median down this quarter,“ said Domain Chief Economist, Dr Andrew Wilson.
Darwin house prices decreased marginally over the December quarter, to a median price of $591,167, a 0.5 per cent decrease.
Despite the recent steadying of quarterly house price declines, the Darwin median fell by 10.5 per cent over 2016. The Darwin median house price is now the lowest recorded in the local market since December 2011.
Darwin unit prices held steady over the December quarter, with the median price remaining at $454,716. Darwin quarterly unit prices increased by 6.1 per cent over 2016.
“The Darwin housing market is continuing to show signs of balancing out. 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,“ said Domain Chief Economist, Dr Andrew Wilson.