Home prices across Australia’s capital cities improved by an average of 1.9% in the three months leading to September, keeping the housing market in positive territory for four quarters in a row for the first time since 2010, the latest data from the Australian Bureau of Statistics (ABS) shows.
While the growth rate failed to meet economist predictions for an increase of 2.1%, it contributed to a strong 7.6% rise in average house prices in the year to September.
The quarterly improvement was mainly driven by the 3.6% increase in house values in Sydney. Melbourne was the second best performer in July-September, seeing home prices go up by 1.9%. Hobart was third with a rise of 1.4% in prices, and Brisbane came fourth with a 1.2% improvement.
In the 12 months to September, home values in the country’s biggest property market, Sydney, advanced by 11.4%. Melbourne scored a 6.8% rise, while Brisbane prices grew by 4.1%.
The figures prove that the country’s housing market is steadily growing, especially in Sydney, where “things really are starting to heat up,” JPMorgan economist Tom Kennedy said as quoted by The Sydney Morning Herald. Melbourne is also enjoying positive market development, similar to Brisbane, where price appreciation was also solid, he said.
Kennedy believes the current developments on the housing market are also a result of measures aimed at restoring the construction industry, and higher prices are supportive of this as they stimulate activity and investment.
The surge in Sydney’s housing prices comes after years of underperformance when compared to other capital cities, and also reflects the low supply of houses available for purchase, Macquarie Bank senior economist Brian Redican commented.