Property prices in Australia’s capital cities showing mixed results

September 14, 2019

After 18 months of relentless price falls, the national property market appears to have bottomed out. But the situation is very mixed from capital city to capital city.

In August, the national median property price recorded its first monthly gain since October 2017, according to CoreLogic. Buyers seem to have responded to three positive signals:

  • Interest rate cuts
  • Looser lending standards
  • The Coalition’s election win (which meant the retention of negative gearing)

However, while it’s interesting to look at a national average, each capital city is in different stages of its cycle.

Sydney

Australia’s biggest capital appears to have bottomed out, after falling about 15% from its peak.

The median dwelling price fell 6.9% over the year to August, but climbed 1.6% over the month and 1.9% over the quarter.

Don’t expect another price surge, though. BIS Oxford Economics has forecast just 6% growth for the next three years – unsurprising, considering Sydney’s last boom was so long (2012-17) and ended only recently.

Melbourne

Melbourne is in a similar position to Sydney. It also enjoyed a long boom, before prices started retreating in 2017.

Prices appear to have bottomed out, after falling about 11% from their peak. Melbourne prices are down 6.2% over the year, but up 1.4% over the month and 1.8% over the quarter.

Like Sydney, slow and steady growth seems much more likely for Melbourne than another boom, with BIS forecasting a 7% gain over the next three years.

Brisbane

Every man and his dog has been tipping Brisbane to boom over the past five years, but prices have increased by just 7.2% during that time – less than inflation.

Brisbane’s time in the sun, though, may be imminent. BIS has forecast 20% growth for Brisbane over the next three years – the most for any capital city.

Right now, though, Brisbane is stagnant, with CoreLogic reporting price falls of 0.1% over the quarter and 2.1% over the year.

Adelaide

The Adelaide property market has quite a bit in common with the Brisbane property market right now.

Prices climbed 9.9% over the past five years, according to CoreLogic, which was in line with inflation.

BIS has forecast 11% growth for Adelaide over the next three years, and expects it to be the second-fastest growing property market in Australia.

Perth

It’s a completely different story in Perth, where the housing slump shows no sign of ending.

Prices have fallen 20.6% since their peak, 20.1% over the past five years, 8.8% over the past year, 1.8% over the past quarter and 0.5% during August, according to CoreLogic.

That said, BIS believes the bottom is near, and has tipped 7% growth between now and 2022.

Darwin

Darwin’s property market has copped an even bigger pounding than the Perth property market since the mining boom ended.

Prices have fallen 30.7% since their peak, including 30.2% over the past five years and 9.7% over the past year. Prices have since dropped another 1.7% over the quarter and 1.2% over the month.

But just like with Perth, BIS expects the city to gain 7% over the next three years.

Hobart

The Hobart boom appears to be over. Prices have jumped about 37% in the past four years, but growth over the year to August was just 3.1%.

Hobart is still moving forward, but now at a crawl rather than a gallop. BIS anticipates 4% growth over the next three years.

Canberra

Canberra might very well be Australia’s quiet achiever.

Our nation’s capital has recorded steady growth over the past five years (22%) and has been forecast to keep growing steadily over the next three (10%).

Prices fell 0.4% over the quarter, but rose 0.8% in August, according to CoreLogic.

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