Australian home prices close to market highsAustralian house values have risen 1.7% in the first three months of 2013, close to record highs.
Low interest rates and rising confidence mean values are only 1% below the peak of June 2010, according to the Australian Property Monitor house price report.
The cities of Melbourne, Sydney, Perth and Darwin all recorded significant increases in their median house prices during the quarter.
Andrew Wilson, senior economist for Australian Property Monitors, says, “The national housing market has recorded its best start to a year since the strong market conditions of 2010.
Strengthening auction clearances rates and increased residential lending activity have translated into rising house prices over the March quarter.”
He believes that buyer activity is set to increase through the remainder of 2013, driven by record low interest rates and rising confidence.
“Much, as usual, will depend on the performance of both the national and local economies with the current general outlook however remaining optimistic. Growing optimism and rising house prices will continue to motivate home buyers and investors to take advantage of historically low interest rates that more likely than not have now bottomed out.”
Melbourne had the best price growth at 3.6%, which is its best performance for three years, but remains 4.2% below its previous peak.
In Sydney, median house prices rose 1.6% and the city has now posted consecutive quarters of record level median house prices.
Andrew Wilson, senior economist for Australian Property Monitors, says the market is now in "a solid expansionary phase of cyclical house price growth."
The Brisbane housing market rose 0.5% and the city has now recorded three consecutive quarters of growth in house prices for the first time since the September quarter of 2010.
In Perth house prices rose 1.3% and in Darwin they were up by 1.8%, as their strong economies attract high numbers of workers from elsewhere.
Perth house prices have now risen 5.2% in the year to the end of March with Darwin values up 5.4%, the best performances of all the capital cities.
The only falls came in Adelaide, down 0.8%, and Canberra, down 0.4%. Subdued home price growth reflects the burden of struggling local economies, with relatively high and rising unemployment, says Mr Wilson.
Although Hobart recorded a 0.5% rise in the median house price over the March quarter, the market remains subdued, also due to its struggling local economy. Hobart house prices remain 9.2% below their previous peaks, the worst performance of all the capital cities.