The ABS's Residential Property Price Indexes data published this morning showed price gains on a weighted-average capital city basis advanced by a further 1.6% in the March quarter as the pace of growth over the year accelerated from 2.5% to a 2½-year high of 7.4%. Since reaching their most recent trough mid-way through 2019, national prices have risen by 8.2% as the combination of increased certainty post the Federal election, the recommencement of the RBA's rate easing cycle and a softening in macroprudential controls appear to have helped stimulate demand. The 1.6% rise in Q1 was slower than the gains from the final two quarters of 2019 (+2.4% in Q3 and +3.9% in Q4) and the outlook is now considerably uncertain following the onset of the COVID-19 pandemic that has resulted in the disruption of real estate transaction activity over Q2.
The two largest markets being Sydney (1.9%qtr, 10.0%yr) and Melbourne (2.1%qtr, 10.4%yr) have driven the upswing in the national index. In the Sydney market, house prices have clearly outperformed price rises in units, while in Melbourne the price gains have been more even across both segments.
The price movements on a city by city basis are presented in the summary table, below.
The Brisbane market firmed over the past year driven by the established house segment, though price gains were still fairly modest overall at 2.5%yr. Prices had been little changed in Adelaide and while annual growth in Perth prices continued to remain negative after several years of decline, prices lifted in the city for a second consecutive quarter for the first time in 6 years. In Hobart, annual growth had slowed to 2.1% in Q3 last year but had since picked up again (7.0%yr). The Darwin market continued to see weakness in both house and unit prices, while in Canberra annual price growth lifted from 1.9% to 3.0% with houses leading that market higher.
