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The real estate market has experienced its strongest growth in over four years, with all capital cities experiencing a rise in house prices over the December quarter, according to the latest Australian Property Monitors Quarterly Housing Report.
Nationally, the price of houses crept to a new record median price of $597,556. This was the strongest quarterly rise in four years, at 3.7 per cent.
The national median house price increased by 9.8 per cent, which was the best annual result since 2009.
The Sydney housing market was a star performer throughout 2013, with extraordinary December quarter buyer activity achieving the second highest quarterly house price rise on record. Sydney’s median house price increased by an exceptional six per cent over the three months to December. Over 2013, Sydney’s house prices rose by 15.1 per cent, with the median house price now at a record high of $763,169.
Melbourne house prices increased by 3.2 per cent over the December quarter, with the median house price now at a new peak of $568,824. During 2013, Melbourne house prices increased by 8.6 per cent - the second best result, behind Sydney.
Perth also recorded a solid year in 2013, with median house prices up by 8.4 per cent. After signs of a plateauing market emerged in the September quarter, price growth resumed at 1.8 per cent in the three months to December.
“All capital city median house prices are now at or close to new records thanks to 2013’s combination of low interest rates, reasonable economic performance and rising confidence,” Andrew Wilson, senior economist at Australian Property Monitors, said.
“Last year’s buyer momentum will ensure a positive start to 2014. However, prices growth is set to moderate over the year as economic activity wanes. Brisbane and Perth, however, are likely to be exceptions, driven by strengthening local economies.
“The Sydney market has been supercharged by record levels of investor and changeover buyer activity in the $1 million to $2 million price range - particularly in the upper north shore and inner west suburban regions.
“The current level of price growth in Sydney, however, is unsustainable, particularly given the likely continued deterioration of the local economy and the prospect of a flood of new rental properties overshooting underlying market fundamentals.”
