House prices jump 3.3% in second quarter
July 30, 2009House prices have recorded their strongest growth since late 2007, rising, on average, by 3.3 per cent in the second quarter of this year, a national survey shows.
House prices are now back to levels last seen before the onset of the global financial crisis and are expected to continue rising over the rest of 2009 and into 2010, a survey by Australian Property Monitors (APM) found.
The national median house price rose to $484,308 in the June quarter, from $468,694 in the March quarter.
Most of the growth was driven by increased house values in Darwin, Hobart, Melbourne and Sydney, APM said.
APM economist Matthew Bell said the market had been consolidating since the first quarter of 2009 and that had now been transformed into strong growth across the country.
"The national housing market has experienced its strongest quarterly growth in both house and unit prices since the global financial crisis took hold late in 2007," Mr Bell said in a statement.
While the market had been supported by low interest rates, flat prices and a boost to the federal government's first home owner grants, the upper end of the sector had been particularly strong in the June quarter.
For Sydney, Melbourne and Brisbane, median housing prices in the top 50 per cent of suburbs grew by nearly double the rate of those of the bottom 50 per cent in the quarter.
"Not surprisingly this has coincided with the stockmarket rebounding by nearly 30 per cent from its March lows and the economic outlook improving," Mr Bell said.
In Australia's two biggest markets, Sydney and Melbourne, house prices rose by 3.7 per cent and 5.8 per cent in the June quarter, respectively.
Darwin experienced exceptional growth of 11.2 per cent from the March quarter, while Hobart house prices gained seven per cent.
Across the nation, the median apartment or unit price increased by two per cent to $349,093 in the June quarter, from $343,322 in the March quarter.
The strongest growth was in Hobart (3.3 per cent) Melbourne (up 2.8 per cent), Sydney (2.6 per cent) and Canberra 2.2 per cent.
Mr Bell said the upswing in the housing market should encourage property investors who had been waiting for interest rates to bottom and the run off of the federal government's boost to the first home owner's grants, expected later this year.
"Rising unemployment remains the biggest risk to house prices, but this risk has lessened over the past quarter with forecasts of peak unemployment falling below eight per cent and the economy expected to avoid a technical recession," he said.
"With population growing strongly and strong housing finance figures yet to translate into a significant rise in new building starts, all indicators point to house prices continuing to rise in the second half of 2009 and well into 2010."
