Property Market Information: Home values stay sustainable

By the resi financial blog team, 12 February 2015

Property Market Information: Home values stay sustainable

One of the best things you can hear as a property owner is that house prices are sustainable. Like your favourite worn-in lounge suite, values have stayed at a comfortable level over the past 12 months according to the Housing Industry Association (HIA) and Australian Bureau of Statistics (ABS) data. 

It will come as a relief to many analysts that ABS data shows prices have been climbing moderately across the capital cities, as measured by the ABS Residential Property Price Index (RPPI). During the December 2014 quarter, dwelling prices increased by 1.9 per cent on the previous three months. When compared to the same period 12 months prior, home prices were 6.8 per cent higher than current levels. 

Unsurprisingly, there was a fair bit of variation in the results. Sydney house prices still appear to be driving overall results, with value here increasing 12.2 per cent between the December quarter in 2013 and the same period in 2014. It showed much more marginal growth from September quarter - prices only grew 3.4 per cent - but this was still significantly higher than all other capital cities. 

Looking beyond Sydney, value increases were a lot more moderate. HIA Senior Economist Shane Garrett said this is a promising sign that balance is being reinstated into the property market, something that will come as a sigh of relief to buyers in particular. With the impacts of the rate cut yet to be fully felt, those looking to buy property can now look to the next month with optimism.

"Today's ABS figures show that dwelling price growth is now comfortably sustainable," he said. 

Mr Garret noted that when inflation is taken into account, the home price growth is now around 5 per cent annually. 

"This is exactly the kind of home price growth that prevails over the long term. Australian home price growth is now striking the right balance."

With the property market clearly settling down, it could be time to get a foot on the property ladder with a new home loan. Get in touch with a resi loan specialist for expert advice on how to manage the financing of a new house.  

Categories: Home Loans