May 1, 2014 – 10:19AM
Sydney halts, Melbourne falls and Brisbane starts to emerge as nation’s best performer.
There is more evidence that surging property prices are turning buyers away, with the latest data suggesting only nominal growth over the past month.
RP Data-Rismark figures for April show that dwelling values nationally rose only 0.3 per cent, which is well down on the 2.3 per cent growth of the previous month and in some cities is the lowest monthly growth in a year.
All capitals recorded some rise in dwelling values during April except for Melbourne, which fell 0.5 per cent, and Canberra (down 1.1 per cent).
Australian house prices are cooling. Photo: Rob Homer
Brisbane had the strongest growth of the major capitals at 1.1 per cent, while Sydney property prices grew at a paltry 0.5 per cent, which was the slowest monthly gains since June 2013. In March dwelling values in Australia’s most expensive city rose 2.8 per cent.
This lower rate of growth, especially in Sydney and Melbourne, where property values have surged since the end of 2012 ‘‘may signal that these markets are moving through the peak of their growth cycle’’, said RP Data’s director of research, Tim Lawless.
RP Data’s senior research analyst Camerson Kusher said this stellar growth in Sydney was having an impact buyers’ ability to afford property, especially at the lower end price range.
‘‘Affordability constraints are now entering the market,’’ he said.
‘‘The lower end of the market, while it is still seeing value rise, the rate of value growth across that segment has really slowed….we know at the moment a lot of the activity is actually at the middle and top end of the market.’’
Despite this Mr Kusher expected values in Sydney would continue to rise but probably at a more moderate pace than over the first quarter of the year.
‘‘I think Sydney will continue to be one of the best performing capital city markets albeit the rate of growth is probably not going to be as strong as we’ve seen in the past.’’
There was a similar pattern in Melbourne, where the top end of the market was still showing the most strength.
‘‘That lower end of the market is starting to slow as the higher prices really mean that a lot of those buyers aren’t in a position where they can afford to buy a property,’’ Mr Kusher said.
‘‘We are coming into a seasonally softer part of the year. When you are looking at a month to month index that isn’t seasonally adjusted it is quite possible that we could see some more monthly dips in the Melbourne housing market.’’
But Mr Kusher said Brisbane would be where the action is this year.
‘‘Brisbane is going to be the strongest housing market going forward from here and that is purely because the gap in pricing between Sydney and Melbourne compared to Brisbane has really widened and that was always the thing in the past that attracted people to Brisbane.’’
Of the other cities, Adelaide had the best monthly growth of 2.1 per cent, followed by Darwin at 1.1 per cent, while Perth and Hobart dwelling values grew by 0.2 per cent.
This slow down in the nation’s house prices follows a similar trend reported by Fairfax Media-owned Australian Property Monitors, which found that growth had eased in the first three months of this year, compared with the last quarter of 2013.
Source : The Sydney Morning Herald