Updated
Sydney home prices continued to rise last month, but the steam appears to be going from Melbourne's market.
The mixed performance of Australia's major cities, including a 2 per cent slide in Brisbane prices, resulted in a flat result overall for capital city home prices in February, according to the widely-watched RP Data - Rismark index.
Home prices in February
- Sydney: up 0.8 per cent, median price $610,000.
- Melbourne: down 0.2 per cent, median price $515,000.
- Brisbane: down 2 per cent, median price $445,000.
- Adelaide: down 0.2 per cent, median price $396,550.
- Perth: down 0.2 per cent, median price $514,500.
- Hobart: up 1.4 per cent, median price $325,500.
- Canberra: down 0.8 per cent, median price $520,000.
- Darwin: up 0.7 per cent, median price $520,000.
Hobart posted the strongest gain of 1.4 per cent for the month, while Sydney prices maintained their momentum, rising 0.8 per cent.
However, Melbourne prices eased 0.2 per cent, along with Perth and Adelaide, and Canberra was down 0.8 per cent.
The mixed results still leave average capital city home prices 9.5 per cent higher than they were a year ago, with Sydney more than 13 per cent higher, and Melbourne almost 10 per cent up.
Outside the capital cities, home prices rose 0.6 per cent in January, and are up 2.8 per cent over the past year.
Tim Lawless says the lack of national home price growth last month is probably just a normal pause after two very strong months.
"The likelihood is that the weak reading for February is an adjustment from the strong readings in December and January rather than the beginning of a flat to negative growth phase across the macro level housing market," noted RP Data's research director Tim Lawless.
However, he does expect the housing market to lose traction later in the year, due to a lack of affordability and growing wariness of rising interest rates.
"Our view is that housing market conditions will start to wind down later this year as affordability constraints and low rental yields dampen market conditions," Mr Lawless added.
"Additionally, with a belief that mortgage rates are likely to start tightening later this year, it may help to quell some of the exuberance we have been seeing."
The RP Data - Rismark report shows the strongest growth in home values over the past six months has been at the more pricey end of the market at 6.8 per cent, while more affordable homes have risen 3.5 per cent over that period and been flat nationally over the last three months.
After a small decline in December, new home sales rose in January, according to a survey of major builders by the Housing Industry Association.
The trend to apartment living continued, with a 1.6 per cent rise in multi-unit sales easily eclipsing a 0.3 per cent rise in detached home sales.
"New home sales have been rising pretty steadily since the third quarter of 2012, encouraged by the falling interest rates and the return of confidence to the housing market," observed HIA senior economist Shane Garrett.
"The return of house price growth to most cities has done much to oil the market and allow transactions to start occurring in greater numbers."
New home sales were 17 per cent higher than in January 2013.
Over the three months to January, South Australia had the strongest increase in new homes sales (50.4 per cent), while Queensland (17.8 per cent) and New South Wales (6.2 per cent) also recorded growth.
Sales declined in Western Australia (-1.1 per cent) and Victoria (-12.3 per cent).
Topics: business-economics-and-finance, economic-trends, housing-industry, money-and-monetary-policy, australia
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