Sydney and Perth lead nation in home value growth

By the resi financial blog team, 06 January 2014

Sydney and Perth strong growth for investors in property

Property values in Sydney and Perth are growing at a faster rate than anywhere else in the country, according to new research published by RP Data this month.

The RP Data-Rismark October Hedonic Home Value Index showed that year-on-year dwelling values in Sydney have increased 12.5 per cent - and 8.9 per cent in Perth.

These figures may signal that it is a good time for investors to seek out the best fixed interest rates and make a property purchase in these cities - particularly as properties in Sydney and Perth also yield the highest rental returns.

According to RP Data-Rismark, total gross returns in Sydney stand at 17.4 per cent, while those in Perth were recorded at 13.9 per cent.

However, Sydney also remains the most expensive capital city in Australia in which to buy property - the median dwelling price was recorded at $640,000 for the month of October. In comparison, the median property price in Perth was recorded at $500,000 - a figure lower than the median price of homes in Darwin, Melbourne and Canberra.

According to Cameron Kusher, senior analyst with RP Data, the combined capital city index is experiencing its fastest growth rate in two years - and combined property values across all Australian capital cities are eight per cent higher than they were a year ago.

"Although we are seeing home values generally trending  higher across the capital cities, Sydney and Perth are still  the only individual capital city markets in which home values are now higher than they were at their previous peak," Mr Kusher said in a recent media statement.

However, the market could be near its peak - and while further growth may be expected during the current property cycle, it could be that the quick pace of increasing values could be drawing to a close.

Categories: Home Loans