Home price growth is expected to ease from its recent blistering pace, but not in Sydney.
Capital city home values rose 0.3 per cent in February, seasonally adjusted, slower than the 1.3 per cent recorded in January, the RP Data-Core Logic Home Value Index shows.
Sydney is still the strongest market, with prices up 13.7 per cent in the 12 months to February, almost double the pace of the next best market in Melbourne, and up on a 12.4 per cent rise in 2014.
The median house price in Sydney has now passed three quarters of a million dollars, and a flat will set you back over half a million.
The good news for potential buyers elsewhere is that national price growth is easing.
In the 12 months to February, prices rose 8.3 per cent, compared to a 10.1 per cent rise in the 2013/14 financial year.
RP Data research director Tim Lawless said a bleaker economic outlook and declining housing affordability could mean lower interest rates may not give the housing sector the boost it normally would.
“Weaker jobs growth, higher unemployment, declining affordability, low rental yields and political uncertainty are all factors that could dent consumer confidence,” he said.
St George senior economist Hans Kunnen also expects national home price gains will be more modest in 2015.
“A flood of new residential buildings suggests a moderation in the pace of growth could lie ahead,” he said.
“However, a rate cut in February and the likelihood of another rate cut in the not-to-distant future suggests further strength in the housing market.”
Increasing supply of new housing was evident in figures released by the Housing Industry Association (HIA), which showed new home sales grew 1.8 per cent in January.
Sales of flats, townhouses and semi detached houses rose 9.9 per cent and houses rose only 0.1 per cent. HIA chief economist Harley Dale said he expects an increase in new housing, which will in turn keep a rein on home prices.
“The headline result is consistent with further growth in new home construction in 2014/15, following a very strong year in 2013/14,” he said.
MEDIAN CAPITAL CITY HOME PRICES IN YEAR TO FEBRUARY:
* Sydney – up 13.7pct to $680,000
* Melbourne – up 7.4pct to $515,000
* Brisbane – up 5.9pct to $452,200
* Adelaide – up 3.4pct to $410,000
* Canberra – up 1.8pct to $510,000
* Darwin – up 1.6pct to $530,000
* Hobart – up 0.7pct to $336,500
* Perth – up 0.6pct to $510,000
Source: RP Data-Core Logic