Ray White Group
Apartment price growth continues as house prices pull back slightly.
A surprise rate rise in June and more stock coming to market led to house prices pulling back in Australian capital cities by 0.1 per cent in July. More surprisingly, apartment price growth continued, increasing by 0.1 per cent in the same month. However, all cities are still recording increases year-on-year for both houses and apartments.
The cities with the biggest house price falls were Sydney, Hobart and Adelaide with a decline of 0.2 per cent. Brisbane fell slightly by 0.1 per cent. Elsewhere, we saw house prices remain stable over the month. Since the start of the year, Adelaide and Perth have recorded the strongest price increases for houses.
Apartment price increases were strongest in Brisbane, Adelaide and Perth, all increasing by in excess of 0.3 per cent over the month. There was no capital city that recorded a decline in apartment prices over the month and all cities are now recording significant increases over the past 12 months. Brisbane and Adelaide are recording the largest increases.
There are a lot of push and pull factors in house prices at the moment. Interest rate rises may not be over and we are seeing more stock coming to market. Anecdotally, more investors are selling, driven out of the market by higher interest rates and a more difficult ownership environment in many states. Rental growth is also starting to slow for houses across Australia, but remains strong for apartments. One positive about the growth, particularly in apartments, is that it is likely making more new projects viable. This will ensure greater housing supply over the next two years.