High five, Aussie house & unit price rise

HOUSE and unit prices across five Australian cities registered striking increases in the first half of 2007, according to the latest RP Data-Rismark Hedonic Index.

The index found despite of the gloomy forecasts, the Australian residential property market has continued to experience a strong rebound during the first six months of 2007 with property prices increasing by 6.6%.

The growth in property prices during the first half of 2007 comprised a 6.0% increase in the price of houses and an 8.5% increase in the price of units. These rates of growth are significantly higher than the historical averages registered for the Australian market over the last 25 years.

RP Data’s chief executive Graham Mirabito said the median value of an Australian property has increased to $432,365, pushing the great Australian dream beyond the grasp of a growing number of families.

The median house price in Australia is now $459,402, whilst the median unit price is $365,322.

Rismark International’s managing director Christopher Joye said whilst some commentators have been forecasting a housing market contraction over the next five years, Rismark has been insistent in projecting, outside of WA, a robust rebound in 2007/2008.

“The striking recovery in the national housing market over the last six months vindicates our forecasts and can be attributed to a fundamental discount between the demand for new housing and the availability of supply,” Joye said.

During the period, Adelaide led the house price growth with a rise of 11.6%; followed by Brisbane with 10.6%; Melbourne with 7.9%; and Darwin with 9.0%.

Finally, Sydney houses have also experienced their strongest growth in years, with a 3.4% increase during the period.

The index also found investors are doing well out of the tight Sydney rental market with rental yields between 4-5% for the June 2007 quarter. The Hunter region and Wollongong reported modest increases over the last six months with prices rising by 2-3% for houses and units.

Meanwhile, the Perth housing market has seen a turnaround with sluggish growth of just 1.5%. And in line with the recent turnaround, properties in Perth remain “on the market” for approximately 51-66 days, well above the market norm during Perth’s boom times in 2006 which saw property being listed for only 30 days.

No surprise here, the index shows Sydney and Perth remain the two most expensive markets to live in with median house prices of $559,770 and $505,115, respectively.

They were followed by the comparatively less expensive cities of Brisbane ($411,491), Melbourne ($402,817) and Adelaide ($359.504).

Unit prices also recorded growth, once again led by Adelaide with 21.9%; followed by Brisbane with 15.7%; Melbourne with 10.2%; Darwin with 14.2%; Perth with 8.6%; and Sydney with 4.7%.

Perth is far and away the most costly unit market, with a median unit value of $460,549; followed by Sydney with $407,181; Melbourne with $322,470; Brisbane with $301,264; Adelaide with $280,908; and Darwin with $278,538.

Australian Property Journal