Australian Home Prices Reach Record on Sydney, Melbourne Highs
Australian home prices surged to a record in September, driven by dwelling values at all-time highs in Sydney, Melbourne and Brisbane.
The RP Data-Rismark capital city index jumped 5.5 percent from a year earlier across Australia’s major cities, 0.7 percent above the previous record in October 2010, according to an e-mailed release from the researchers. Sydney and Melbourne led gains in the three months to Sept. 30, climbing 5.2 percent and 5 percent respectively to unprecedented levels.
The price surge underscores concerns of a bubble, particularly in Sydney, as buyers take advantage of the lowest mortgage rates on record and auction clearance rates exceed 80 percent. Sydney-based SQM Research Pty forecasts prices in the city will soar as much as 20 percent, leading gains of as much as 11 percent nationwide, while property broker McGrath Estate Agents predicts the current pace of growth can’t continue.
“Any debate about unsustainable growth in housing markets should be very much focused on Sydney and Melbourne,” Tim Lawless, research director at RP Data, said in today’s release. “The Australian housing market is broadly in the middle of a healthy growth phase; however if the growth trend in Sydney and Melbourne continues at the same pace into 2014, then there may be some cause for concern.”
Prices across Australia’s biggest cities climbed 3.7 percent in the three months to Sept. 30, with detached houses rising 3.8 percent and apartments increasing 3.2 percent, the RP Data-Rismark index showed.
Australia’s state capitals recorded total gross returns of 10.1 percent as of Sept. 30, led by Sydney with 12.8 percent and Perth with 12.6 percent, according to the data.
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