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Housing market still strong despite expectations of slowdown17 March 2004 The housing market remained strong in the December quarter 2003, despite earlier expectations of a slowdown in growth, according to the latest edition of Market Facts, released today by the Real Estate Institute of Australia (REIA). The strong pace of market growth was maintained through the December quarter 2003 in all capital cities except Melbourne. Furthermore, median house price growth for the year to December 2003 was higher for all capitals except Sydney and Melbourne, compared with annual growth to September 2003.
Hobart’s median house price increased 15.1% over the quarter to $226,300 whilst the Brisbane median price increased 11.1% over the quarter to $350,000. Growth in other capital cities for the quarter was: Darwin (8.0% to $230,000); Perth (7.9% to $236,300); Canberra (6.8% to $332,000); Adelaide (6.7% to $240,000); Sydney (6.4% to $500,000) and Melbourne (0.8% to $371,000). In comparison, prices for flats/units/townhouses grew at a much slower pace in most cities in the December quarter. The median price in Hobart fell to $164,000 in the December quarter, down 7.9%. Melbourne also experienced a decline in the median price of flats/units/townhouses, down 0.3% to $289,000. Growth in other capital cities for the quarter was: Sydney (2.8% to $370,000); Adelaide (2.9% to $180,000); Canberra (3.9% to $278,000); Perth (6.9% to $177,300); Brisbane (8.7% to $232,000); and Darwin (10.3% to $160,000). There was little change in median weekly rents for house or flats/units/townhouses in the quarter to December 2003. The highest increase in house rental was 6.1% to $260 per week in Darwin. Brisbane recorded the highest annual increases with house rents rising 15.0% and rents for flats/units/townhouses rising 22.2% in the year to December 2003. Vacancy rates decreased in four cities (Brisbane, Adelaide, Perth and Hobart) over the quarter, remained unchanged in Sydney and increased in Melbourne, Canberra and Darwin. "We expect that the recent interest rate rises and the decline in home loan affordability (as reported in the AMP Banking / REIA Home Loan Affordability Report for December quarter 2003) will begin to have an effect on house price growth within the next few months. March quarter figures will help to establish the slowing trend in the residential property market," says Mrs Ballard.
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"While
quarterly growth in house prices was stronger than expected in the December
quarter, there are signs of a slowdown definitely in place. The median
price for flats, units and townhouses, a focus for investors, is down.
House price growth in Sydney and Melbourne also slowed in the year to
December 2003," says Kareena Ballard, REIA President.