Capital cities property values reach record high

houseAustralian capital city dwelling values have reached a record high according to new figures.

The CoreLogic July Home Value Index reported a 0.8 per cent rise over the month, taking capital city dwelling values 6.3 per cent higher over the first seven months of the year.

July’s quarterly figures revealed that Sydney has been the best performing city in recent months, with values soaring by 5.6 per cent.

Sydney remains the most expensive city in Australia, with a median property price of $775,000.

Hobart wasn’t too far behind in quarterly growth though, with values having increased by 5.2 per cent.

The next biggest increases were seen in Melbourne (3.5 per cent), followed by Canberra (0.7 per cent) and Adelaide (0.2 per cent).

Brisbane, Perth and Darwin recorded negative growth for the quarter, with Darwin being the weakest performer.

The rate of growth across the combined capitals was 2.9 per cent for the quarter. July marked the 50th month since the beginning of the combined capitals growth cycle, which commenced in June 2012. Over the cycle to date, capital city dwelling values have risen by 38.3 per cent.

While the rise in property prices is good news for homeowners, it also highlights the issue of housing affordability for those who want to break into the market.

According to research director at CoreLogic Tim Lawless in the report, the growth trend rate is still tracking considerably faster than income growth, resulting in a deterioration of housing affordability.

“Using Sydney as a case in point, the Australian National University estimates that Sydney household incomes have grown by approximately 4.5 per cent per annum since June 2012 while dwelling values are up 12.1 per cent per annum,” Mr Lawless said.

Housing affordability is an issue in this country, however price growth has been slowing over the last year thanks to tightening of lending criteria.

The dream of home ownership is still well and truly alive; however housing sentiment is shifting towards more affordable suburbs and housing across the country, which is likely to be popular following the recent interest rate cut.