Australian property prices rise 3.9% in Q4

The upswing in Australian house prices gathered momentum towards the end of 2019 after a near two-year-long downturn came to an end in Q3. According to the ABS's Residential Property Price Indexes data released this morning, the weighted average of capital city prices lifted by 3.9% in Q4 — its strongest quarterly increase in 3 years — as annual growth turned positive (2.5%) for the first time since Q1 2018. The factors that have supported this upswing include the resumption of the Reserve Bank of Australia's rate cutting cycle, an easing in macroprudential controls and increased certainty around tax policy following last year's federal election.  

The overall upswing continued to be driven by Sydney (4.7%qtr) and Melbourne (5.2%qtr), with prices in both of those markets posting their sharpest increases in a single quarter since Q4 2016. Excluding Darwin (-0.8%qtr), prices increased across the other capitals in Q4 but at much more moderate paces; Brisbane 1.8%, Adelaide 1.4%, Perth 1.1%, Hobart 2.7% and Canberra 3.1%. 

The full details across the segments for each capital city are shown in the table, below. On a national basis, house prices (4.2%qtr, 2.8%yr) have risen at a noticeably faster pace than in the unit segment (3.4%qtr, 1.9%yr), which reflects the strength in the established detached markets in Sydney and Melbourne. House prices in the two major markets saw increases exceeding 5% in the December quarter. The most timely data from CoreLogic showed that prices on a combined capital city basis increased by 0.9% in January and by 1.2% in February, though based on the softening evident in last weekend's auction clearance results, it appears likely that activity will be impacted by concerns relating to the coronavirus outbreak.   

The ABS estimates that the total value of dwelling stock lifted by 4.3% in Q4 — its fastest quarterly increase on record — to $7.213tn to be up by 6.2% over the year.