Prices rise across the nation

Posted on 1/09/2009  

Home prices have risen in all capital cities in the first seven months of 2009, new research suggests. The RP Data-Rismark Home Value Index says values have increased 5.9% since the start of the year.


It also reinforces the predictions of that investors and upgrade buyers would rise in prominence as the activity of first-home buyers waned (we forecast first-home buyer activity would decline before the FHOG boost was phased out as pent-up demand was exhausted).


The index shows that Australian home values rose 0.9% in July. “Underpinned by historically low mortgage rates and only small rises in unemployment, Australian home values have now risen 1.8% percent past their February 2008 peak,” says RP Data’s national research director Tim Lawless.


“Not only has Australia’s residential market out-performed other major western markets, it has also provided superior returns compared to shares, commercial property, superannuation, hedge funds and private equities.

“Australia’s residential market has been further supported by low mortgage default rates, at just 0.6%, compared with 5% in the US and 3% in the UK.”


Darwin (up 10.8%), Melbourne (up 8.5%) and Sydney (up 6.6%) have led price growth this year. Brisbane (3.8%), Canberra (5.4%), Perth (2.5%) and Adelaide (1.9%) have also had price rises.


Continuing the trend seen in the second quarter of 2009, houses (up 1.1%) out-performed units (up 0.5%) in July. In the three months to the end of July, house values increased 2.4% while unit values rose 1.6%.


Rismark International managing Director Christopher Joye says the housing market will “grind out further modest gains” in the next 12 months.

“Home values are now increasing steadily in all areas including Australia’s most expensive suburbs,” he says. “This has eviscerated the popular myth that the recovery was being driven exclusively by first timers at the cheaper end of the market. While first-time buyers did initially furnish the early momentum, upgraders and investors have now taken over the baton as we expected. This is reflected in the superior performance of houses compared with units since the first quarter of 2009.”


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