By Terry Ryder, 5th October 2012
Notions of recovery in the property markets of our major cities have been reinforced by price growth in the month of September and in the September Quarter.
Most of the state and territory capitals recorded improvements in the value of property in September and during the latest quarter.
This follows growing evidence of increasing loan demand, increased buyer confidence, reduced stock for sale, improving clearance rates and rising city rentals.
The latest home value index from RP Data-Rismark suggests dwelling values rose in six of the eight major cities in the September Quarter. Sydney, Perth, Melbourne, Brisbane and Adelaide all recorded significant rises in the month of September and capital city average rise of 1.4% was the highest increase since March 2010.
The quarterly result was a 2% rise across the capital cities, the biggest since May 2010.
Darwin generally is the market leader: its home value index rose almost 4% in the September Quarter and its rental yields are the highest among the capital cities. Research from other sources indicate Darwin is also the city leader in rent growth.
Australian property markets have improved to the point where half of the major cities have home value indexes higher a year ago, headed again by Darwin.
Unit markets have done particularly well, with Perth, Adelaide, Darwin, Canberra, Hobart and Melbourne all recording significant rises in the September Quarter.
RP Data research director Tim Lawless says the September result was the fourth consecutive month-on-month improvement in the home value index.
“The strong performance of the housing market since the beginning of June has reversed the falling house prices recorded earlier in the year,” Lawless says. “The improving market conditions can mostly be tied back to the low interest rates currently in place.”
This suggests there will further improvement following the RBA’s latest rate cut on Tuesday, the 5th in the past 12 months. The trends bode well for property investment across Australia.
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